Administrator Person with a legal right to act on behalf of an estate.
Application Form for providing information to underwrite a policy.
Attachment Legally taking a defendant’s property.
Balance Sheet Financial statement of assets, liabilities and net worth.
Bank Depository Bonds Guarantees the deposit of public funds.
Bankruptcy Trustee Bond Guarantees that the court-appointed trustee will administer the debtor’s estate (assets) as ordered by the bankruptcy court.
Bid Bond Guarantees that a contractor will deliver a specific project for the amount of the bid and will post the required performance bond.
Blanket Bonds Guarantees the honesty of all an organization’s employees.
Blanket Position Bonds Guarantees the honesty of a list of employees.
Blanket Public Official Bonds Guarantees all public employees of a public organization.
Blanket Position Public Official Bond Guarantees the honesty of a list of public employees of a public organization.
Capacity The maximum amount of risk that a surety can underwrite in a single bond.
Commercial Bonds All bonds, except those classified as contract or performance, are commercial bonds. These bonds are usually required by law and are unique for each case.
Commercial Blanket Bonds Guarantees the honesty of all employees of an organization
Conservator A court-appointed person or entity empowered to manage the affairs or property of a person or entity that is unable to do so.
Contract Bonds Guarantees the performance of a person or organization in fulfilling the terms of a contract. Most of these contracts are for construction, and the contractor must meet prequalification standards before being approved for the bond.
Court Bond A type of judicial bond guaranteeing payment of loss incurred by delay or deprivation of property resulting from a lawsuit. For example, an appeal bond guarantees that a litigant will pay a judgment if an appeal to a higher court is lost.
Damages A sum of money awarded in a lawsuit or a sum of money that an insurance company is obligated to pay an insured or claimant for losses incurred.
Defendant A person or entity against whom a lawsuit is brought.
Defendant Bond A type of court bond purchased by a defendant to recover attached property. The bond guarantees payment of a judgment obtained against the defendant
Employee Retirement Income Security Act In place since 1974, this act requires a bond of 10 percent of the value of pension and profit-sharing funds.
ERISA Bond Trustees or others handling private pension funds are required under the Employee Retirement Income Security Act (ERISA) to post a fidelity bond equal to 10% of the assets of the pension funds.
Errors and Omissions Insurance Covers damages resulting from negligence or mistakes that occurred in the course of doing business.
Executor Carries out the provisions of a deceased person’s will.
Fidelity Bonds Guarantee employee honesty.
Fiduciary Person appointed by a court to act on behalf of another, including the administration of an estate and the management of a trust or ward. Fiduciaries are often asked to post bonds guaranteeing their performance.
Fiduciary Bonds Guarantees the performance of a fiduciary. See fiduciary. Fiduciary bonds are sometimes referred to as probate bonds.
Funds Control If a contractor does not qualify for a bond, another party may obtain the necessary bond and be responsible for paying subcontractors and suppliers.
Indemnification or Indemnity Clause A contractual provision in which the first party agrees to reimburse a second party for a specified or unspecified loss incurred by the second party.
Individual Bonds A bond written for a specific public official.
Large Deductible Plans Large deductible plans pay all losses in a claim, including the deductible. The covered party pays back the deductible to the insurance company on a monthly or quarterly basis. Deductibles for this kind of coverage typically range from $25,000 to $1 million per claim or larger.
License or Permit Bonds Bonds required by law as a prerequisite for obtaining a license or permit to engage in a specified business or to receive a certain privilege.
Guarantee that a completed project will meet its requirements for workmanship or materials for a specified period. These bonds may include a provision for “efficient or successful operation.”
Minor A person who has not reached the legal age of majority (18 years of age in most states).
Miscellaneous Bonds Any bonds that don’t fit in an otherwise recognized category.
Name Schedule Bonds These list individual people and the amount for which they are bonded. These bonds are used for city council members or other groups of government officials.
Name Schedule Public Official Bonds These bonds use one bond with a list of names of the people and the amount for which they are bonded.
Notary Public Bond Bond required for a person authorized by a state to administer oaths, certify documents, attest to the authenticity of signatures and perform official acts in commercial matters.
Obligee A person to whom an obligation is owed. When a surety bond is issued to the obligee, the surety guarantees that the obligee will receive a payment or performance owed to it by another person (the principal).
Open Penalty Unlimited liability of a bond’s surety.
Ordinance A municipal regulation.
Payment Bonds Guarantees payment by a contractor to subcontractors, laborers and suppliers involved in a project. Because liens may not be placed on public projects, a payment bond is an excellent assurance that all parties associated with a contract will be paid.
Penalty A specified sum payable under a bond if the underlying obligation is not performed.
Pension A fixed sum paid regularly to a person or the person’s beneficiary.
Performance Bond A bond in which the surety guarantees the timely performance of a construction contract upon the default of the general contractor.
Plaintiff Person or organization who initiates a legal proceeding.
Plaintiff Bonds These bonds are required before legal proceedings begin. They guarantee the plaintiff can pay any damages the court decides against it.
Position Schedule Bonds Similar to blanket position public official bonds, except that instead of attaching a list of the names of the insured people, there is a list of positions covered. This approach is used for organizations with high employee turnover and therefore reduces the paperwork required each time a person leaves the organization and a new one is appointed.
Premium The payment charged for an insurance policy or bond.
Principal Bonded person, company or organization.
Public Official Bonds Guarantees a public official will act according the requirements of his or her position. The bonds are usually required by the unit of government the public official serves.
Public Official Person serving in a government position.
Rate A numerical value assigned to risk, used in calculating the premium charged for an insurance policy or bond.
Reclamation Bond Guarantees an organization will restore land after a project to its original state.
Replevin A civil action for repossession of personal property wrongfully taken or retained by another person.
Retrospective Plan Involves a premium payment based on incurred losses and an administrative charge.
SBA The Small Business Administration (SBA), which assists small- and minority-owned contractors secure surety bonds.
Self-Insurers Retention Plan Bond used for programs such as Workers’ Compensation, general liability or other coverage where only limited or expensive are available.
Supply Bond Guarantees the supplies or materials will be procured and delivered as specified in a contract.
Surety Person or organization guaranteeing the actions of another.
Surety Bond Guarantees a principal party will fulfill an obligation to an obligee. (Complete surety bond definition)
Surety Industry Surety insurers issue contract and commercial surety bonds through licensed insurance agents and brokers.
Treasury Listed Sureties Are sureties authorized by the U. S. Department of the Treasury to issue contract bonds to federal construction contractors.
Trustee A fiduciary holding legal title to property held in trust for the benefit of one or more persons (beneficiaries). A trustee is obligated to protect, preserve and administer the trust property solely for the benefit of the beneficiaries.
Work-on-Hand Reports Financial statement showing a contractor’s work in progress.
Workers’ Compensation Self-Insurers Bond Workers’ compensation laws mandate that employers pay employees injured on the job. Organizations can meet their requirements by buying insurance or posting a bond guaranteeing that they can pay. Workers’ compensation surety can involve a long period of exposure including these two statutory bond forms:
- Traditional-Bond Form: In this case, the surety must pay any workers’ compensation claims filed during the time the bond is in force-even after the bond is canceled.
- Last Surety On -Bond form: The surety incurs all liability for paying self-insured workers’ compensation claims but is released from all liability if a replacement security is posted.