There are several types of surety bonds available on the market today, such as contractor bonds and medicare surety bonds. One type of bond that comes to mind is a performance bond that guarantees the work of a contractor to be completed as per contract and protects the consumer from poor business practices, business failure or fraud. A surety bond is an insurance policy issued by a third party that guarantees the services of the purchaser of the bond to the purchaser of the services. So if you hire a company to replace the roof of your home, they begin work and mid way the company fails, with the surety bond the consumer can claim damages to have their work completed.
Another type of surety bond is a bail bond. A bail bond is a type of surety bond that guarantees that the person charged with a crime will return to the court for a trail if released from jail until the court date. The bail bondsmen is in fact the provider of the surety bond, the accused is the purchaser of that bond, and the government assumes the position of the consumer by expecting the accused of returning for trial.
Custom bonds are another type of surety bond. Importers provide a bond that states that items being imported into the United States will comply with all regulations and laws concerning that product and pay all import or duty taxes required. These types of bonds can be for a single imported shipment or can be a renewable policy for companies that are in the import business and are continually bringing in goods.
A Notary Public is also a bonded position. A notary must be bonded to ensure proper performance of fiduciary duties to the public. Since a notary authorizes and makes legal a variety of documents, it is imperative for the notary to carry a surety bond to protect everyone involved in the transaction. Payment bonds are also a type of surety bonds. Payment bonds are generally purchased by the consumer and presented to the contractor they are using as a guarantee of payment for their services. Contractors may also purchase payment bonds to provide to their sub contractors and to their suppliers for guaranteed payment protection.
License and permit bonds, issued by government agencies, are surety bonds that guarantee consumer protection and compliance with any relevant laws or regulations. These can include real estate licenses, driver’s licenses and mortgage broker licenses.
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