Common Types of Commercial Surety Bonds

Commercial surety bonds are an agreement between a principal and an obligee that a certain obligation will be performed. A wide range of bond types comprise commercial surety bonds, and Merchants is a market for the majority of commercial surety bonds.


 License and Permit Surety Bonds
License and Permit (L&P) bonds are the most common type of commercial surety bonds. L&P bond requirements are derived from statutes, codes, and ordinances, which are enacted by regulatory bodies at various levels. Governmental authorities require a licensee or permitee to post a bond as a condition of the business licensing or permit process.

 Notary Surety Bonds
A notary bond is required by many states to ensure that notaries perform their notarial duties in accordance with the law. The bond amount is determined by each state and can range from $500 to $25,000.

 Fiduciary/Probate Surety Bonds
Probate bonds are required by the court when one person is handling the affairs of another person. They are a fiduciary guarantee, obligating one person to act on behalf of and in the best interest of another. A bond is required at the discretion of the court and varies from state to state.

 Court Surety Bonds
Many court cases require court bonds for plaintiffs or defendants. They protect the other party involved in the case to prevent financial losses, especially if action is needed prior to the final judgment.

 Public Official Surety Bonds
Public official bonds are needed by various elected or appointed officials to guarantee that the public official will faithfully perform their job duties. Breaches of those duties could include fraud, dishonesty or neglect.

Non-Construction Performance Surety Bonds
Non-Construction Performance (NCP) surety bonds guarantee “non-sticks-and-bricks contracts." This includes any contract that does not relate to a building or construction job. NCP bonds include: Service contracts; Supply contracts; Supply & Install and/or Fabricate & Supply.

 Theft Guard Fidelity Bonds
Theft Guard fidelity bonds protect businesses and business owners from losses associated with employee dishonesty. Theft Guard fidelity bonds are specifically designed to mitigate the risk of employee theft. 

 ERISA Bonds
ERISA bonds provide protection for these private industry retirement or health plans. The bond protects the employee benefit plan from fraud or dishonesty committed by those who handle the plan funds. Retirement plans, health plans or welfare benefit plans may need ERISA bonds. 

 Insurance Program Surety Bonds
Private insurance plans for businesses may require collateral to secure the policy.  A Merchants Bonding Company insurance program bond is a cost-effective solution to meet this collateral requirement. 

 Miscellaneous Surety Bonds
Miscellaneous bonds include any bonds that do not fall under the other main bond families. Examples include patient trust fund bonds, utility deposit bonds, lost securities bonds, union wage and welfare bonds, and more.