Our agency issues many different types of commercial surety bonds besides court and fiduciary bonds.  We refer to this class of bonds as “miscellaneous bonds.” The Surety Association of America (SAA) describes miscellaneous bonds as those not within the commercial surety classifications of the SAA Rate Manual.

Miscellaneous bonds tend to feature specific requirements and unique obligations. Therefore, underwriters must research outside the bond forms to discover the nature of the obligations and what financial liabilities the principal and surety undertake. Because these bonds have such specialized obligations, most underwriters shy away from them. However, O&P takes the time to sift through the information to fully understand many types of miscellaneous bonds.

Most miscellaneous bonds are required by government bodies. The federal government may require bonds for the payment of taxes, including estate taxes, as well as bonds to guarantee the eventual payment of due taxes at specified date in the future. These bonds basically grant a delinquent tax payer more time to pay off his taxes. These bonds require strict underwriting because a principal who cannot already pay taxes on time demonstrates an inability to honor financial obligations.

Other types of miscellaneous bonds:

  • Financial guarantee bonds are a type of bond simply guaranteeing the payment of money. These bonds usually involve investment bankers and require disciplined and highly experienced underwriting.
  • Advance payment bonds for estates allow an administrator or executor pay himself commissions from an estate prior to the judicial settlement of the administrator/executor’s filed accounting’s.
  • A common miscellaneous bond our office issues is a lost instrument bond. These bonds protect the issuer of a lost document in the event both an original and a duplicate are submitted to the issuer in exchange for payment.
  • Abandoned property bonds guarantee to the government a person claiming the abandoned property is the rightful owner.

We will discuss lost instrument, abandoned property, and other miscellaneous bonds in more detail in upcoming blog posts.