Required by federal, state, or local governments as a condition for obtaining a license or permit for various occupations and professions. License and permit bonds include auto dealer bonds, mortgage broker bonds, contractor license bonds, and surplus lines broker bonds.

These bonds are either required by municipal governments, federal government or state government, depending on the situation. It’s relevant in all states and many businesses need a license and permit bond in order to receive their license to start operating in their chosen field. This bond protects both consumers and the government. It acts as a guarantee that you as a licensee will abide by legal guidelines, regulations set by municipalities, state laws and statutes relevant to that specific industry, usually to provide assurance that the public’s health and safety will be upheld. If not, there will be financial compensation.

For example, it protects against financial loss in the event an agency doesn’t pay over a client’s money to a third party or it can be a guarantee that should a business damage public property, it will be repaired. In the event of a licensee not upholding the terms of the agreement, a license may be cancelled and a claim can be made on the license bond.

Commercial surety bonds cover a very broad range of surety bonds that guarantee performance by the principal of the obligation or undertaking described in the bond. They are required of individuals and businesses by the federal, state, and local governments; various statutes, regulations, ordinances; or by other entities.

A miscellaneous bond is often also called a commercial bond. This is a non-contract bond and the term miscellaneous is used since it refers to bonds not relevant to most other categories of surety or fidelity type bonds. Examples include Fundraiser Bonds, Mortgage Broker Bonds and Roofer Bonds.

These are commercial surety bonds that do not fit into any of the types above. Included are a wide variety of bonds, such as warehouse bonds, title bonds, utility bonds, and fuel tax bonds. 

Companies purchase miscellaneous bonds when in need of surety bonds, but when it doesn’t relate to any legal guidelines, a construction project or a work contract. These bonds can also act as reinforcement of legislation, for example legal guidelines relating to permits and licenses. Qualification for these bonds are often easier to attain than many other bonds, because of the lower risk associated with them.