Types of Surety Bonds: A Complete Guide to Every Category

If you’re new to bonding altogether, start with our guide to what a surety bond is before going deeper into the categories below.

The Three Main Categories at a Glance

1. Commercial Bonds (License & Permit, Court, Public Official)

Commercial bonds are the biggest category by volume. Most state-required business licenses include a bonding requirement, and every state has dozens of bonded professions.

License & permit bonds

These guarantee that a licensed business will follow the laws and regulations of its industry. If the business breaks those rules and causes financial harm, the bond pays affected parties up to its face value.

Common examples:

• Notary bonds — required for notaries public in most states. Usually $5,000–$15,000 in coverage. Learn about notary bonds.
• Auto dealer bonds — required to operate a licensed motor vehicle dealership. Range from $25,000 to $100,000 depending on state. Auto dealer bond guide.
• Contractor license bonds — required for state-licensed contractors. California’s standard $25,000 bond is the most well-known. Contractor license bond explained.
• Freight broker bonds — federal FMCSA requirement of $75,000 for freight brokers (the BMC-84). Freight broker bond explained.
• Mortgage broker bonds — required by most state banking departments for licensed mortgage brokers and loan originators. Mortgage broker bond explained.
• Tax preparer bonds — California’s CTEC bond ($5,000) is the highest-volume example. Tax preparer bonds.
• Public adjuster bonds — required for licensed public insurance adjusters in most states. Public adjuster bond explained.
• Private investigator bonds — required for licensed PIs and detective agencies. Private investigator bonds.
• Process server bonds — required in some states (CA, IL, OK, others).
• Utility bonds, liquor bonds, medical provider bonds — additional licensed industries with bond requirements.

Court bonds

Required during legal proceedings to protect the court or the parties involved from financial harm caused by a court decision being executed prematurely or improperly.

• Probate bonds — required for executors, administrators, and guardians handling an estate.
• Appeal bonds (supersedeas bonds) — required to stay the execution of a judgment while appealing. Usually require 100% collateral. Get an appeal court bond.
• Fiduciary bonds — required for guardians, trustees, conservators, and other fiduciaries.
• Replevin bonds and attachment bonds — required when seizing property pending the outcome of a lawsuit.

Browse all court bonds.

Public official bonds

Required for elected and appointed officials who handle public funds — treasurers, clerks, tax collectors, and similar positions. These bonds protect taxpayers and the government from financial loss caused by misconduct.

Miscellaneous commercial bonds

A catch-all category for bonds that don’t fit cleanly into license, court, or public official. Includes:

• Lost title bonds (certificate of title bonds) — used when a vehicle title is lost and ownership needs to be established with the DMV.
• ERISA bonds — federally required for handlers of employee benefit plan assets. ERISA bond explained.
• U.S. Customs bonds — required to import goods into the United States. Customs bonds.

2. Contract Bonds (Bid, Performance, Payment, Maintenance)

Contract bonds — also called construction bonds — guarantee performance on a specific project. Federal construction contracts over $150,000 require them under the Miller Act. Most state and municipal projects have similar requirements.

Bid bonds

Filed with a bid submission. Guarantees that if the contractor is awarded the project, they will sign the contract at the bid price and provide the required performance and payment bonds. BondsExpress issues bid bonds at no charge — you only pay if the project is awarded. Learn about bid bonds.

Performance bonds

Guarantees the contractor will complete the project according to the contract’s terms, specifications, and timeline. If the contractor defaults, the surety either hires a replacement contractor or compensates the project owner. Learn about performance bonds.

Payment bonds

Guarantees that subcontractors, laborers, and material suppliers will be paid. Usually issued together with a performance bond, with a combined premium of around 3% of the contract amount. Learn about payment bonds.

Maintenance / warranty bonds

Guarantees the contractor will fix defects in workmanship or materials during the warranty period after project completion. Usually run for 1–2 years.

Contract bonds for contractors with credit challenges

BondsExpress runs specialized programs for contractors who have been turned down elsewhere — including a bad-credit program for contracts from $100,000 to $10 million. Underwriting is based on your track record as a contractor, not your credit score.

3. Fidelity Bonds (Related But Different)

Fidelity bonds technically aren’t surety bonds — they’re a two-party agreement, not three-party — but they’re sold and discussed alongside surety bonds in the industry. They protect a business from theft, fraud, or dishonest acts by its own employees. The full difference is covered in our surety bond vs. fidelity bond guide.

Most common types:

• Janitorial bonds (cleaning business bonds) — protect clients of a cleaning business from theft by cleaning crews working on their property. Janitorial bond guide.
• ERISA fidelity bonds — federally required for anyone who handles 401(k) or pension plan assets. Coverage must equal 10% of plan assets (minimum $1,000, maximum $500,000 — or $1,000,000 for plans holding employer securities).
• Business service / dishonesty bonds — protect businesses and their customers from employee theft. Dishonesty fidelity bonds.

Federal vs. State Surety Bonds

Surety bond requirements come from three levels of government:

• Federal — FMCSA freight broker bonds, U.S. Customs bonds, ERISA bonds, federal construction Miller Act bonds, and Medicare DMEPOS bonds.
• State — most license and permit bonds (notary, contractor, auto dealer, mortgage broker, public adjuster), plus state-level court bonds.
• Local — city and county bond requirements (right-of-way bonds, local contractor permit bonds, vendor bonds). Often more granular than state bonds.

Browse bonds by state to find the specific bond requirements in your jurisdiction.

How to Know Which Bond Type You Need

Most people don’t pick a bond type — the obligee tells them which bond they need. If you’ve been told you need to be bonded, here’s how to identify the exact bond:

1. Read the obligee’s exact wording. Government licensing boards, courts, and project owners specify the bond name, bond amount, and sometimes the exact form number.
2. Note the bond amount. This is the maximum the surety will pay on a valid claim — not what you pay in premium.
3. Check whether a specific bond form is required. Some agencies have proprietary bond forms that must be used exactly.
4. Verify your industry has a known bond. Most bonded industries have well-established bond types.

Browse BondsExpress’s bond catalog by state to find yours.

Not sure which bond you need?
BondsExpress’s team can identify the exact bond based on your state, license type, and obligee name. We’ve placed more than 9,000 different bond types since 1965.

Cost Comparison by Bond Type

Premiums vary widely by bond type because the underlying risk varies. For full pricing context, see our surety bond cost guide.

Frequently Asked Questions

• What are the three main types of surety bonds?
  Commercial bonds, contract bonds, and fidelity bonds. Commercial bonds allow a business to operate or hold a license. Contract bonds guarantee performance on construction projects. Fidelity bonds protect a business from employee theft.
• What is the most common type of surety bond?
  License and permit bonds (a type of commercial bond) are the most common. They include notary bonds, auto dealer bonds, contractor license bonds, freight broker bonds, and many others. Most state-licensed industries require some form of license bond.
• Is a license bond the same as a surety bond?
  A license bond is a specific type of surety bond. The term ‘surety bond’ covers all bond categories. The term ‘license bond’ refers specifically to bonds required to obtain or maintain a business license.
• What is the difference between a surety bond and a fidelity bond?
  A surety bond is a three-party agreement that protects an outside party from the principal’s conduct. A fidelity bond is a two-party agreement that protects a business from theft by its own employees. Janitorial bonds and ERISA bonds are technically fidelity bonds.
• What is a court surety bond?
  A court surety bond is required during legal proceedings to protect the court or other parties from financial harm. Common types include probate bonds (for estate executors), appeal bonds (to stay a judgment), and fiduciary bonds (for guardians and trustees).
• Are payment bonds and performance bonds the same?
  No. A performance bond guarantees the contractor will complete the project. A payment bond guarantees subcontractors and suppliers will be paid. They are usually issued together as a combined bond on construction projects.
• How do I know which type of surety bond I need?
  The agency, court, or project owner requiring the bond will specify the exact bond name and amount. If you’ve been told to get bonded, ask them to confirm the bond name and any required form. BondsExpress can help identify the bond if you’re unclear.
• Do all 50 states require the same types of surety bonds?
  No. Each state sets its own bond requirements. Federal bonds (FMCSA, ERISA, U.S. Customs, Medicare DMEPOS) are uniform nationwide, but state license bonds vary significantly in amount, term, and required form.

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