Miscellaneous Bond

  1. License Bond
    1. Definition: type of commercial surety bond required by governmental regulatory authorities usually in the form of a license to engage in the activities they regulate
  2. Permit Bond
    1. Definition: Required by state law, municipal ordinance, or by regulation and in some instances by the federal government or its agencies to guarantee that a contractor who has been issued a permit complies with the laws and ordinances regulating the privilege for which the permit was issued
  3. Street Opening Bond
    1. Definition: Required if a street is being disturbed by construction
    2. Each municipality, state, or government party requires the bond in a unique and specific format
    3. The Obligee determines the dollar amount to assure that the street is brought back to pre-construction form and that the improvements hold for the maintenance period in case the applicant does not fulfill their obligation to complete and maintain the street opening/improvements
  4. Subdivision Bond
    1. Definition: Ensures that the subdivision’s improvements will be made according to the governing body’s engineer’s letter of instruction outlining the improvements
  5. Notary Bond
    1. Definition: Protects those who work with notaries from fraud and any other errors related to their work and deters notaries from unethical conduct while performing their duties
    2. Serves as a risk management tool
    3. If a notary makes a mistake, a claim can be filed against the bond so that the Obligee can receive financial reparation
  6. Mortgage Broker Bond
    1. Definition: Protects the consumer in the event of wrongful practices or fraud on the part of a lender or broker
    2. Wrongful practices include:
      1. Knowingly approving a borrower for a loan for more than he or she can afford to repay
      2. Encouraging a buyer to commit fraud on an application
      3. Putting pressure on buyers into purchasing certain loan products
      4. Establishing an interest rate on the basis of anything other than the borrower’s credit history
      5. Charging unnecessary or additional fees
      6. Deliberately going after vulnerable or at-risk buyers and suggesting cash-out refinances
      7. The amount of the bond depends on the average amount of mortgage loan volume serviced in a year and the state in which business is conducted
  7. Motor Vehicle Dealer Bond
    1. Protects consumers against fraudulent actions by an auto dealership and requires compliance by the auto dealer with all laws and tax regulations
  8. Sales Tax Bond
    1. Guarantees that a business (such as a car dealership) will pay the anticipated sales taxes on yearly acquisitions/sales
    2. Considered a financial guarantee surety bond obligating the Surety to pay a certain amount of money at a future date if the Principal fails to pay collected funds to the Obligee or if there is incorrect reporting