License Bonds
License and Permit Bonds
License and permit bonds are surety bonds that businesses in many industries are required to have in order to become licensed to conduct business within a particular state or municipality. The federal government and many state and local governments require businesses to obtain a license bond before they are issued a license or permit to conduct certain types of work.
All businesses that fall within certain industries in Minnesota are required to obtain either a license bond or permit bond. Operating without a bond makes a business susceptible to fines and penalties by the state of Minnesota.
How License Bonds Work
License Bonds are usually required by the government to ensure that their rules, standards and guidelines for certain industries are upheld by a licensed business or individual.
Although license bonds are purchased by businesses, they do not offer protection to the business itself. If a business is looking to protect itself, the appropriate bond to obtain would be a fidelity bond, which acts as a type of commercial insurance. Instead, license bonds offer protection to the customers of the business. License bonds protect a business’s customers by providing them with indemnity guarantees should they sustain injury or damage as a result of the business’s services, which are laid out within their license.
A customer could file a claim against the license or permit bond of a business if the business:
- Commits fraud
- Breaks the law
- Fails to fulfil its duties as laid out in the license
The Types of License and Permit Bonds
License bonds and permit bonds cover a very broad range of businesses across many industries. Every bond is different based on the services provided by the business in their industry. Some license bonds and permit bonds that are required of businesses in Minnesota include:
- Auto dealer bonds
- Collection agency bonds
- Contractor license bonds
- Auctioneer bonds
- Credit service organization bonds
- Mortgage broker bonds
- Insurance broker bonds
- Travel agency bonds
- Pest control bonds
- Freight broker bonds
- Title agency bonds
- Car wash bonds
- Detective or private investigator bonds
- Check casher bonds
- Telemarketing bonds
- Professional employment organization bonds
- Private school bonds
- Pharmacy bonds
- Home improvement bonds
- Mortgage lender bonds
Obtaining a License or Permit Bond in Minnesota
Need a License Surety Bond? Contact The Patrick J. Thomas Agency for a License Bond application in Minnesota.
