Miscellaneous Bonds

Use Miscellaneous Bonds questionnaire for general inquiries about bonds and inquiries about any bonds that may not be listed.

License and permit bonds are those required by state law, municipal ordinance, or by regulation and in some instances by the federal government or its agencies. To be licensed, a contractor must have a miscellaneous bonds and, in many states, a certain amount of its insurance coverage. The Miscellaneous Bonds may either be one written by a Surety company or, in many states, a cash deposit made with the State. In practice, the terms "license" and "permit" are used interchangeably. The purpose of a license or permit bond is usually to safeguard the public health, welfare, morals, or assure the public's safety. These bonds are usually for the benefit of laborers, suppliers, and taxing authorities, as well as most persons having contracts with the contractor.

The amount of the miscellaneous bonds (the "penal sum") is the total limit of the Surety's liability to all claimants combined. Thus, where a contractor has several claims lodged against its bond, the protection for any individual may be much less than full amount of the bond. A license or permit bond may thus provide someone with only minimal protection. Before entering into a construction contract it is wise for an owner to call the licensing agency to be sure that the contractor is in good standing with bong. Please note that all contractors should have general liability insurance, but one may only check on the status of such insurance with state agencies in those states that require the insurance for licensing.