A permit bond is a bond that professionals in certain industries must purchase to operate legally. This bond ensures that the professional is qualified to do the job and will perform the work in accordance with all legal requirements. It is common for insurance companies to sell permit bonds.
It is also known as a license bond.
Permit bonds are frequently required for professionals such as plumbers and contractors. If a bonded professional fails to perform their work according to the standards promised in the bond, then the bonding company will pay the customer to cover their losses. In this way, permit bonds function both as a quality control measure and as insurance to make sure that consumers do not lose money hiring professionals who do not do their jobs correctly.
Synonyms
License Bond
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