Types of Small Business Bonds

Surety Bonds

Surety Bonds are agreements between three parties: the principal (the business required to obtain the bond), the obligee (the party requiring the bond), and the surety (the company issuing the bond). Surety bonds guarantee that the principal will fulfill their contractual obligations.

Performance Bonds

Performance Bonds ensure that a contractor will complete a project according to the terms and conditions of the contract. They protect the project owner from financial loss if the contractor defaults.

Payment Bonds

Payment Bonds guarantee that contractors will pay subcontractors, laborers, and suppliers for their work and materials, ensuring everyone involved in the project is compensated.

Bid Bonds

Bid Bonds are required during the bidding process for construction projects. They guarantee that the contractor will enter into the contract and provide the required performance and payment bonds if awarded the project.

License and Permit Bonds

License and Permit Bonds are required by government agencies as a condition for obtaining a license or permit to operate a business. These bonds ensure compliance with applicable laws and regulations.

Fidelity Bonds

Fidelity Bonds also known Janitorial Bonds as protect businesses from losses caused by dishonest acts of employees, such as theft, fraud, or embezzlement.