License & Permit Bond
License bonds guarantee the Principal will comply with applicable codes and regulations established by the Obligee. (The Obligee is usually a government entity such as a City, Town, or State.)
Permit bonds grant a Privilege.
- Electrician's license
- Plumber's license
- General Contractor's license
- Driveway permit
- Sign permit
- Sales tax
Example: Electrical contractors may be required to post a bond as part of their licensing requirements. The obligation of the bond may specify that the contractor will follow the electrical codes established in that city, town, or municipality.
The requirements of the surety bond and ordinance must be understood before the bond is written. The agent may ask you to obtain a copy of the ordinance or law that specifies the requirements and a copy of the bond, if the Obligee has its own.
Depending upon the type of obligation, supporting documentation such as signatures, financial statements, and other supplemental information may be required.