What is the Purpose of License and Permit Bonds?
You should understand the importance of license and permit bonds before applying for them. They are a commercial surety bond required for several licensing applications. Almost every business requires a license and permit bond to do business.
License and permit bonds, which may also be known as “license bonds” or “permit bonds” are the ones that are required by certain state, federal, or municipal governments as a prerequisite for receiving the license or permit to engage in a business activity. These bonds are in a sub-category of insurance falling under commercial bonding. These bonds are issued as per the requirement of the government to make certain about the guaranteed performance so that the business can be carried out complying with fundamental statutes, state laws, and municipal regulations. License and permit bonds in New Hampshire are types of commercial surety bonds generally required by states and municipalities so as to acquire a license in a given industry.
Many types of people and businesses will be requiring the license and permit bond. They ensure that any licensed entity or business will be carrying out its work as per the specific state law(s) governing or regulating the industry. The state or federal entity will have to acquire a bond in order to go along with a license. And if the licensee is not able to maintain the terms of his license, he may lose his license and face a claim on the license bond.
Government agencies require every business owner dealing with certain industries to obtain these bonds prior to being licensed lawfully. These bonds act as a protection for consumers by giving a guarantee that the principal will abide by the terms of the license they have filed the bond for. Businesses should adhere to laws and other regulations which are put into effect by federal, state and local government agencies. Some of the most popular license and permit bonds are the following.
Ø Auto Dealer Bonds
Ø Mortgage Lender Bond
Ø Contractor License Bonds
Ø Mortgage Broker Bonds
In order to be licensed, it’s mandatory for the contractor to have a bond and a certain amount of insurance coverage in many states. This bond, however, can either be one written by a Surety company or a cash deposit made with the states. The terms “license” and “permit” are used interchangeably and the main purpose of this bond is to protect the public health, morals, or assure the safety of the public.
The fact cannot be held for denial that license and permit bonds in New Hampshire involve three parties. Anyone filing license and permit bond for their business, it would involve three parties. The first one is you, the contractor or business. The second party is the person who requires the bond, normally the customer. And the third one is the company providing you with the bond.
For reference, you can also mail here: bondrequest@suretybondprofessionals.com
