There’s always a significant element of risk involved in all business transactions. This is why many local jurisdictions and states require contractors to be licensed before obtaining permits for projects. And the process of getting licensed often requires them to be bonded.
Frequently, customers inquire about a contractor’s bond and license to ensure that the business or individual they're hiring meets their state's regulations and is reputable and trustworthy. It also demonstrates whether a conductor possesses the necessary training, skills, experience, and knowledge required for their profession.
Bonds also ensure that the contractor will complete the work according to the trade's mutually agreed time and rules. In case the contractor defaults on their obligatory duties, the owner can make a claim, and the surety will pay the penalty of the claim as a settlement.
Here are some types of standard bonds that are collectively referred to as commercial bonds.
These bonds are a form of insurance protection designed to protect the business against losses incurred by employee dishonesty, embezzlement, theft, or other misconduct types.
These bonds arise out of judicial proceedings and must be possessed by those defending lawsuits or seeking legal remedies. Bail bonds, attachment, mechanic's lien, and appeal bonds are among the most well-known ones.
Business Service Bonds
These bonds are also known as third-party fidelity sometimes and are crucial for businesses that require employees to be on the premises of clients. For example, if an employee is convicted of stealing from a client's house or something gets damaged, janitorial bonds will pay for the loss.
License and Permit Bonds
These bonds are one of the most common commercial bonds, as they're required by the law to obtain a permit or license. The obligee is usually the owner of a project or a government agency. Apart from contractor bonds, it also includes used car dealer bonds, health club bonds, performance bonds, immigration bonds, customs bonds, mortgage broker bonds, carwash bonds, and more.
These bonds aren't directly needed for a profession or trade but are crucial for businesses. They may be tailored according to the fiduciary relationship, type of company and may entail more underwriting. Examples include title bonds, nursing home care, hazardous waste removal, etc.
Contractors also sometimes need to secure bid bonds and performance bonds, especially if the project requires extensive underwriting and prequalification.
Ensure that you choose a surety agent that holds special expertise and knowledge needed to get bonded. Contact bond specialists at SuretyEZ if you’re looking for someone who can answer all your queries about buying the right surety bonds.
We deal with various types of bonds, including lottery bonds, appraisal bonds, contractor license bonds, probate bonds, DMV bonds, and other types of surety bonds in Los Angeles.
Reach out to us at (800) 773-1663 or fill the form to get a free quote.