What Does Commercial Bond Mean?
A commercial bond is a type of surety bond that serves the purpose of guaranteeing the credibility of business people and making sure they follow the laws governing their field. If a person believes that they have been the victim a commercial bond holder failing to follow the laws, then they can file a claim with the surety from whom the bond holder purchased the bond. In this way, the surety acts as an insurer.
Insuranceopedia Explains Commercial Bond
Commercial bonds are basically a form of insurance that hedges against losses caused by unqualified business people or by qualified business people who don’t follow the law. For example, a contractor may find that a client files a claim against him for allegedly not following proper contracting laws. In this case, the surety would pay the claim if it was found to be legitimate. Examples of commercial bonds include license and permit bonds, public official bonds, and probate and other court bonds.