Commercial Bond
What Does Commercial Bond Mean?
A commercial bond is a type of surety bond designed to guarantee the credibility of business professionals and ensure compliance with the laws governing their industry.
If someone believes they have been wronged by a commercial bondholder who failed to adhere to these laws, they can file a claim with the surety company that issued the bond. In this role, the surety functions similarly to an insurer.
Insuranceopedia Explains Commercial Bond
Commercial bonds function as a form of insurance that protects against losses caused by unqualified business professionals or those who fail to comply with the law.
For instance, if a contractor faces a claim from a client alleging a violation of contracting laws, the surety will pay the claim if it is deemed valid.
Common examples of commercial bonds include license and permit bonds, public official bonds, and probate or other court bonds.
