What is a business bond?

A business bond is an agreement that protects a business. Business bonds are also referred to as commercial surety bonds. These bonds are often required by state laws for a wide variety of industries and insure some aspect of a principal's occupation.

There are many different types of business bonds; here are some examples:

AG (Agricultural) dealer bonds

These are required for businesses and individuals who are licensed by the Department of Agriculture to buy and sell agricultural products. Some types of AG bonds are livestock dealer bonds, grain dealer bonds, hay dealer bonds, and produce dealer bonds.

ARC bonds

These are bonds for travel agents and are required by the Airlines Reporting Corporation. The bonds guarantee that sales made by a travel agency are forwarded to the correct airline.

Auctioneer bonds

These bonds are required for auction houses and auctioneers as protection for purchases and bids.

MVD (Motor Vehicle Dealer) bonds

These bonds are meant to ensure that a dealer complies with specific laws. Similar bonds include mobile home dealer bonds, boat dealer bonds, snowmobile dealer bonds, and vessel dealer bonds.

Fuel tax bonds

Fuel sellers are required to have these bonds as a guarantee that they will pay their taxes.

License and permit bonds

These are required by the state, federal, and local governments in order to grant a professional license to an individual or company in a specific industry. They include bonds like electrician bonds, contractor bonds, plumber bonds, and non-resident license bonds.

Liquor bonds

Lottery bonds

Any establishment that has gambling devices or sells lottery tickets is required to get these bonds. These are meant to ensure the proper usage of gambling and lottery machines and prevent abuse of the state lottery system.

Mortgage broker bonds

These bonds are meant to ensure that mortgage brokers comply with state laws and regulations under their specific mortgage broker license code.

Public official bonds

Public official bonds are typically meant to protect taxpayers and ensure the ethical performance of public officials.

Title bonds

Title bonds are also referred to as a certificate of title bonds, lost title bonds, and defective title bonds. They are required when registering a vehicle or other property when its title has been lost or is defective.

Utility bonds

Utility bonds are financial commitment bonds that guarantee the payment of utility bills.

Warehouse bonds

These bonds have to do with ensuring that products or other goods stored in a warehouse will be received upon the presentation of a receipt.