top of page


Bonds are a way to ensure honesty and fairness in a business. They operate differently than an insurance policy, and might be for an individual, position, or blanket position. Many skill-related positions require bonds. It guarantees that one person or business will do something for another person or business.

For example:  Joe (called the Principal) wants to do a job for ABC Co (called the Obligee). ABC tells Joe they will hire him if he provides a bond.  Joe gets his bond from a bonding company (called the Surety) and ABC gives him the job. If Joe fails to do what he is supposed to, the Surety company pays ABC.

A bond is not insurance as we generally think of it. With insurance, if you have a loss, your Insurance Company pays, and the claim is closed.


If Joe, in the example above, fails to do what he was supposed to do (defaults), the Surety Company pays ABC Co, but that's not the end of the matter.  The Surety Co will go after Joe to get their money back.

Types of Bonds

Fidelity Bonds protect against loss due to a dishonest act by a bonded employee.


Public Official Bonds guarantee the "Faithful Performance" of an elected or appointed  official.  


Judicial Bonds are court ordered.  

        Bail Bonds guarantee that a defendent will show up for trial.


Fiduciary Bonds guarantee the conduct of someone appointed to handle the affairs       of others.

    Guardian or Conservator Bonds involve a minor or incapacitated person.

    Administrator Bonds involve a person who is deceased. 


License and Permit Bonds guarantee compliance with laws, ordinances, or regulations.


Contract Bonds most often involve construction projects.

        Bid Bonds guarantee that the bidder will enter into the contract, if awarded.

        Performance Bonds guarantee the contractor will do the work according to             the contract.

        Payment Bonds guarantee payment of labor and materials costs


bottom of page