License and Permit Bonds

License and permit bonds are often called simply license bonds. This is a specific type of commercial bond, which is purchased in order to run a business in certain industries. The government makes it mandatory for private business owners to purchase these bonds before they can legally sanction a license.

The purpose for a license bond is that it guarantees that a business will operate in accordance with federal, state, or local laws and regulations. Each license bond is specific to the mentioned industry and protects customers and/or the state from damages by the individual business.

The price of a license bond will vary, depending on several factors, such as the specific industry, the business size and state. The most important factor is the applicant’s credit score. A premium must be paid and is a certain percentage of the total bond amount required, calculated on a case-by-case basis.

There are a number of industries where one needs to have a license, a few examples are:

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Contractor’s Licenses: Ensures that contractors, electricians, plumbers, and general contractors follow their contractual obligations.

Customs Bonds: Must be obtained by anyone looking to import goods into the United States or run a business in import related fields. The purpose of such bonds are to guarantee that businesses follow import/export laws.

Auto Dealer Bonds: Ensures that the entire automobile industry follows specified regulations.

Reclamation Bonds: Related to environmental protection in the mining industry. It safeguards parties operating legally and guarantees that they do not harm the environment.

Broker’s Bond: This bond caters to mortgages, title agencies, and insurance policy providers. The different types of Broker Bonds available are Freight Broker, Insurance Broker, and Mortgage Broker Bonds.

Health Spa Bonds: Makes sure that all spas are registered with the appropriate agency and follow laws and regulations.

Agricultural Packers Bonds: Ensures that fair trade practices and financial integrity are adhered to for any company that sells or resells agricultural products.

Alcohol Bonds: In order to manufacture, sell, ship or warehouse alcoholic beverages these bonds are required by federal and state governments. They keep a check on the payment of taxes collected on liquor and other alcoholic beverage sales.

ARC Bonds: Required by the Airlines Report Commission for any legally operating travel agency. This ensures that the travel agency submits air travel payment collected from the customer to the airline.

Brewers Bond: Also known as a TTB bond, it is a type of alcohol tax bond which is required in order to legally operate a brewery.

Business Opportunity Seller Bond: This bond ensures that someone who is looking to open their own business (ergo, who wants to create a “business opportunity”) abides by the state’s respective laws and regulations.

Cigarette Tax Bonds: Ensures payment of taxes on cigarettes. This bond is required for the cigarette distributors.

Collection Agency Bonds: Ensures a collection agency operates within the rules and regulations specified. Collection agencies are considered high risk because they are in the business of collecting debts, and often have a negative reputation in the public eye.

Contractor License Bonds: Required by local governments in order for a contractor to legally operate in certain locations.

Credit Services Organization (CSO) Surety Bonds: A form of protection for buyers of various credit services and guarantees that CSOs comply with all applicable state regulations.

Department of Defense (DoD) Performance Bond: Also known as Military Freight Bonds, it is obtained by all transportation brokers that wish to transport DoD freight.

Detective/Private Investigator Bond: Commonly known as a private investigator bond, it is used to safeguard clients receiving services from professional investigators.

Franchise and Ordinance Bond: Guarantees that those licensed to grant a privilege on a public property comply with all regulations and ordinances.

Freight Broker Bonds (BMC-84): Important for operation as a transportation broker, and are a requirement of the Federal Motor Carrier Safety Administration (FMCSA). They protect shippers and motor carriers.

Fuel Tax Bonds: Used to check the payment of taxes on fuel sold.

Grain and Commodity Bonds: Guarantees the compliance of regulations governing dealers of grain and other commodities, which includes payment to producers, as well as other protections.

Health Club Bonds: Ensures that a health club makes good on their customers’ prepaid membership.

Home Dealer Bonds: Must be obtained by home dealers to guarantee their performance with off-site built homes.

Money Transmitter Bonds: Required by most states to guarantee that money transmitters operate within the terms of their license.

There are lots of other types of bonds which are required right from getting the suitable license to the enormous needs for the business establishment. Also, it prevents a great loss when it comes to start working on an expensive project.

Surety Bond Professionals offers license and permit bonds in New Hampshire, Massachusetts and other major parts in the US. Get your free quote today by using our bond application form. Contact Surety Bond Professionals, a license and permit bond agency to get an instant quote now.

If you have any questions, please contact us for help.