Commercial Bonds

Commercial bonds are usually required by state and local laws for various professions that require licensing and various industries. Also called business bonds, commercial bonds are bonds that protect businesses in their daily operations. They guarantee that a person or business will operate within the laws of a particular state and the requirements of specific professions. These are typically seen as bonds that are not very risky and easy for individuals and businesses to qualify.

Commercial bonds are a lot like insurance in the sense that they protect a party from a specific action or harmful outcome. However, unlike insurance in which there are two parties involved (the policy holder and the insurance company), with commercial bonds there are three parties involved (the principal, the obligee, and the surety). The principal is the person getting the bond. In the example of a commercial bond, it would be the business or professional needing the bond. The obligee is the specific agency requiring the bond and enforcing any action for non-compliance. And lastly is the surety, the company that is providing the bond to the principal.

The majority of commercial bonds fall into the category of license and permit bonds. Those that don’t fall into that category are referred to as miscellaneous bonds. AIA Surety underwrites a long list of license and permit bonds.

commercial bonds

Get a Commercial Bond

Contact us to get a performance bond by calling (855) 938-1600, emailing us at [email protected] or send us a message below.

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