License and permit bond
A bond a government agency requires before it issues a license or permit, guaranteeing the holder follows the law that governs the licensed activity.
Contract bond
A bond tied to a specific construction or service contract, guaranteeing the work is performed and suppliers are paid.
| Feature | License and permit bond | Contract bond |
|---|---|---|
| What it guarantees | Compliance with the rules of a licensed activity | Performance of a specific contract |
| Who requires it | A licensing agency, as a condition of the license | A project owner, often on construction work |
| When it applies | For the term of the license | For the life of the contract |
| Typical obligee | The government body that licenses you | The party that hired you for the project |
| How the amount is set | By statute or the licensing agency | By the value of the contract |
Best for
Pick License and permit bond
A license and permit bond is what you post when a licensing agency requires a bond as a condition of issuing or renewing your license.
Best for
Pick Contract bond
A contract bond is what you post when a project owner requires a guarantee that a specific contract will be performed and suppliers paid.
License compliance or contract performance
Both are surety bonds, but they answer different questions. A license and permit bond is what a regulator asks for before issuing a license. It guarantees that you will follow the laws governing the licensed activity, and it protects the public if you do not. A contract bond is tied to a specific job, most often in construction. It guarantees that you will complete the contracted work and pay your subcontractors and suppliers.
The practical signal is who is requiring the bond and why. If a licensing agency requires it as a condition of your license, it is a license and permit bond, and the amount is usually set by statute. If a project owner requires it to back a particular contract, it is a contract bond, and the amount tracks the contract value. Many businesses post license and permit bonds for their licenses while contractors also post contract bonds per project.
We place the bonds that licenses require across states. See our services or contact us to size a bond for your requirement.
Frequently asked
- Are bid, performance, and payment bonds contract bonds?
- Yes. Those are common types of contract bonds used on construction projects. License and permit bonds sit in a separate family tied to licensing.
- Does my license bond cover my contracts?
- No. A license and permit bond backs your compliance with the licensed activity, not the performance of an individual contract. Those need separate contract bonds.