A bond in layman’s terms is a way to secure a debt. It is a way for a consumer (being able to cover a little cost up front) to ensure that, “I am letting you borrow this money in accordance with your agreement to pay the face value of said bond if ever needed”. Bonds can be issued by a government, municipality, corporation, federal agency and other entities.
Here are other ways in which bonds can be requested:
A surety bond is a three parties contract. The primary party being a party who will perform a contractual obligation, the second a person who is the recipient of that obligation, and the third – a person who assures the obligation will be done.
Lost title Bond
This is a type of surety bond. It provides a proof and guarantee of ownership to the Department of Motor Vehicles. When no other form of documentation is available, a Lost Title Bond shows the DMV that you are the “owner”.
Contract Surety Bond
Contractor bonds are one of the more popular bonds in the insurance space. These bonds are used in the construction industry by general contractors. They are a guarantee to a project’s owner that the general contractor will adhere to the contract for the work.
License and Permit Bonds
These types of bonds function as a guarantee to a government entity that a company will comply with a statute, state law, ordinance, etc.