Bonds Glossary

Bonds Glossary

This list includes some of the bonds most commonly issued. This list is not all-inclusive as there are many different bonds to suit various needs.  If you need a particular bond not listed, be sure to contact your local INSPRO office today.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


B


Bid Bond
Bid Bonds are commonly required of contractors bidding on construction projects to guarantee that if awarded the bid, the contractor will be able to supply a Performance Bond.


C


Conservator Bond
Conservator Bonds are issued to conservators or guardians of estates, incompetents or others that a court has judged to be incapable of handling their own property.


Court Bond
Court Bonds are required in legal proceedings.  This bond guarantees the payment of damages and court costs if the bonded individual is unsuccessful in the legal action.


E


Employee Dishonesty Bond
Employee Dishonesty Bonds guarantee that an employer will be reimbursed for monetary losses due to dishonesty of employees.  These bonds can be written either on a blanket basis (covering all employees) or specified basis (covering a named individual or class of employees).


ERISA Compliance Bond
ERISA Compliance Bonds are required by the U.S. Government for any employer with a qualified pension or savings account in place.  The law states that the bond limit must equal 10% of the plan assets.


F


Financial Institution Bond
Financial Institution Bonds are issued for the protection of banks and other financial institutions to protect them against losses from employee dishonesty, lost or stolen money or securities, and forgery or alteration of checks and securities.


G


Grain Dealer and Grain Warehouse Bond
Grain Dealer and Grain Warehouse Bonds are financial guarantee bonds as a safeguard to the public against insolvency. Farmers are protected from potential financial loss due to grain dealer/warehouse failures.


Guardian Bond
Guardian Bonds are fiduciary bonds that guarantee that a guardian for a minor or incompetent will exercise their guardianship faithfully and in accordance with the law.


H


H-2A Labor Bond
H-2A is a U.S. government program that allows agricultural employers who anticipate a shortage of domestic U.S. workers to bring nonimmigrant foreign workers to the U.S. for temporary or seasonal labor.  With an H-2A Labor Bond, employers guarantee to offer each covered worker employment for a total number of hours equal to at least 75% of the workdays in the contract period.


L


License and Permit Bond
License and Permit Bonds are regulatory bonds required by statute.  A few examples of this type of bond are:

Motor Vehicle Dealer Bond Fuel Dealer Bond Use of Public Space Bond
Electrician's Bond Master Plumber's Bond Real Estate Broker Bond
General Contractor Bond Public Space Refuse Hauler Bond

Livestock Dealers Bond
Livestock Dealers Bonds are financial guarantee bonds protecting all persons selling or consigning livestock to a licensed dealer.  It guarantees payment for livestock purchased and/or accounting for funds received for sale of livestock.


Lost Title Bond
Lost Title Bonds guarantee repayment up to the bond amount if an individual claims ownership of your vehicle after you have obtained a replacement title.  This bond applies to various types of motor vehicles.


M


Material and Labor Bond
Material and Labor Bonds guarantee to the owner of a construction project that the contractor will pay for labor and materials used in performance of the contract.  These bonds cover payment for all equipment, labor, materials and services in the event the contractor fails to pay for them under terms of the contract.


Mechanic's Lien Bond
A Mechanic's Lien bond is purchased to replace the property value of a lien. This bond prevents a project owner from selling, refinancing or transferring property.


Miscellaneous Bond
Miscellaneous Bonds are those that do not fall within the scope of other sections.  There are a large number of such bonds that INSPRO can handle and it is not possible to list them all.  Please contact your local INSPRO office with questions about types of bonds not shown here.


N


Notary Bond
Notary Bonds are commonly used in many legal situations to guarantee that signatures on a document have been witnessed to be valid and true.


P


Performance and Payment Bond
Performance and Payment Bonds are commonly required of contractors guaranteeing to the project owner that the contractor will be able to complete the construction project in a specified length of time and pay all subcontractors.


Personal Representative Bond
Personal Representative Bonds are used for those trustees appointed either by will or by the courts to handle property in an estate.


Public Official Bond
Public Official Bonds are given by elected or appointed officials in favor of the state or other political subdivision for the faithful performance of their official duties.