• Contract Bonds – Contact bonds hold one party in a contractual agreement responsible if they don’t meet terms established by another party. This type of surety bond is often required for construction projects, but they can factor into other contractual arrangements. Since contract bonds facilitate the smooth execution of a contract – and hold the wrongful party accountable when things don’t go smoothly – they’re one of the most common types of surety bonds.
• Commercial Bonds –Different types of businesses and professionals need a commercial bond before the state recognizes them as a legal business entity. Typically, someone needs to obtain a commercial bond before the state will grant them a license. States use commercial bond requirements to ensure that professionals abide by legal and ethical behavior, and face accountability when they don’t.
• Court Bonds – A judge may require someone to obtain a court bond before allowing legal proceedings to move forward. The court bond holds the bonded party financially liable if they fail to act in a manner required by the court. Court bonds are most common in civil cases.

Fidelity Bonds – Fidelity bonds protect a business and its clients if an employee of that business acts unlawfully. Unlike commercial and court bonds, businesses aren’t required to get fidelity bonds, but many consider it a prudent way to manage risk. Fidelity bonds also operate like an insurance policy, meaning they pay the bonded party, which differs from other types of surety bonds that hold the bonded party financially liable.