What Is a Miscellaneous Bond?
Like the name suggests, a miscellaneous bond is one that does not fall into any construction or court category. It does not have any set characteristic other than the fact that it is a contract between three parties, a Principal, an Obligee and a Surety. Miscellaneous bonds are mostly used situations where the government or some governing authority wishes to ensure that businesses act a certain way e.g. the ethical treatment of staff, or uphold some certain conditions like in the case of bonds required for the issuance of licenses and permits.
How do Miscellaneous Bonds Work?
Miscellaneous bonds usually follow the same routine where a contract between a Principal, an Obligee and a Surety is made. The contract guarantees that the Principal would fulfill certain obligations to the Obligee within a specified period of time and the Surety finances the bond.
to obtain a bond that ensures that the warehouse facility is up standard and does not violate any health code. If the business were to be found wanting in that area during a sanctioned check, then a claim would be filed and the Surety would pay the amount. The Principal is then legally obligated to reimburse the Surety.