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License Bonds

License and permit bonds are a sub-category of bond type.  This commercial bond is required by certain federal, state or municipal governments as a prerequisite to receiving license or permit to engage in certain business activities.

Government agencies require business owners in certain industries to purchase their bonds before they can be legally licensed.  Bonds protect consumers by guaranteeing business adheres to laws and other regulations enforced by federal state and local government agencies.

These bonds function as a guaranty from a Surety to a government and its constituents.



Here are some of the common bonds you may need:

  • Contractor License Bonds -assure that a contractor such as a plumber, electrician or general contractor complies with laws relating to his field.
  • Customs Bonds –protect the public if they do not follow federal regulation, pay required taxes or duties to the U.S. Customs.
  • Mortgage Lender Bond– protects clients if a business does not follow state regulations by charging undisclosed fees on mortgage loans.
  • Insurance Broker Bond– lets you legally operate as an insurance broker and protects clients from insurance fraud.
  • Motor Vehicle Dealer Bonds– assure dealerships to compile with laws relating to that field.
  • Health Spa Bonds– Allows for legal collection of membership dues for a health club.

It is the business owner’s responsibility to have a license bond before conducting work.  Check government and state websites for more information in your industry.  Call our agents with your questions and get reliable insurance information and quotes.