There are dozens of different types of bonds which are divided into a 4 different categories:

  1. Contract/Construction bonds
  2. License bonds
  3. Court bonds
  4. Commercial bonds

When any government or large company hires a contractor, they will usually require that the contractor secure a construction surety bond. The bond is the contractor’s guarantee to the obligee that he will perform as promised. If the contractor (the principal) should fail to perform, the surety company will pay out damages to the obligee. The surety company will then recover the amount of the claim from the contractor plus costs.

  • BID BOND: A bid bond may be required of a contractor in order to submit a bid for a project. The bid bond protects the obligee in the event that the winning contractor is unable to take the job after securing the bid reimburses them the difference between the principal’s bid and the next lowest bidder.

If the contractor has the winning bid, the bid bond will convert into a PERFORMANCE BOND which guarantees that the job will be completed.

Types of Construction/Contract Bonds we provide:

Frequently asked questions regarding bid bonds

Frequently asked questions regarding performance bonds



These bonds are required by governments and municipalities in order to satisfy working requirements. The purpose of this bond is to provide protection to the public along with ensuring compliance for respective industries.

Types of License Bonds we provide:



These bonds provide protection in legal proceedings to the respective parties.

Types of Court Bonds we provide:

  • Appeal Bond – Acquired prior to appealing a court’s judgment to have it overturned.
  • Executor Bond (Administration Bond) – Protects victims against fiduciary dishonesty and misconduct.
  • Probate Bond – Protects the interest of the obligee by demanding the principal to be bonded.
  • Guardianship Bond – Acquired by an individual that wishes to be a guardian of another individual.
  • Notary Bond – Acquired by notaries to protect their signers.


Any bond that is not a contract bond is known as a commercial bond. These include but are not limited to fidelity bonds, business service bonds, and bonds required by governments to secure business licenses.

Types of Commercial Bonds we provide:

  • Auto Dealer Bond – Used in the automobile industry for dealerships.
  • Fidelity Bond – Businesses purchase this bond to cover themselves from fraudulent employees.
  • Janitorial Bond – Janitorial companies use this bond to protect the client’s interest.
  • Utility Bond – Protects Utility companies from defaults from clients.
  • Customs Bond – Required by the Federal government of Canada for brokers.
  • Medical and Medicaid Bond – Protects patients from fraudulent behavior.
  • Lottery Bond – Required to be purchased by business that engage in lottery.
  • Union Bond – Obtained by union workers. 
To know more about how surety bonding works in general across Canada, please visit the frequently asked questions page – https://www.constructionbond.ca/faq/.