The broadest definition of a surety bond is a promise or guarantee to be responsible for certain possible defaults, debts or obligations. In the construction industry, they protect businesses in a variety of ways, including:
- Guaranteeing the completion of a project
- Assuring the payment of contractors
- Helping achieve compliance with state laws
- Protecting against breach of fiduciary responsibilities
Different types of surety bonds include:
- Contractors' License Bonds
- Contract Surety
- Bid Bonds
- Performance Bonds
- Labor and Material Supply Bonds
- Subdivision Improvement Bonds
- Home Owners Association (HOA) Assessment Bonds