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MISCELLANEOUS BONDS
A Professional Surety Bond Agency.
Click here for Secure
Miscellaneous Bond Application
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LICENSE, PERMIT, AND MISCELLANEOUS BONDS
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 bond and, in many states,
a certain amount of its insurance coverage.
The bond 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 bond (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 a bond.
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.
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© Copyright - 2002, Pinnacle Surety. All Rights Reserved.
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