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Glossary of Key Bond Terms

Bid Bond:

A type of contract surety bond that
ensures a bidder for a supply or construction
contract will enter into the contract within the
stipulated timeframe if the company wins the bid.
Default results in the obligee (a government
agency, in this case) receiving the difference
between the amount of the principal’s bid and
the bid of the next low bidder or company
who qualifies for the contract, or the amount
of the bond.

Commercial Surety:

A type of surety bond that
can be required by state and local regulators in
a wide variety of situations to protect consumers
and taxpayers. Some of the most significant for
government policymakers include: license and
permit bonds, reclamation bonds, mortgage
broker bonds and subdivision bonds.

Contract Surety:

Surety bonds that involve
construction projects. In the event a contractor
defaults, contract surety bonds ensure funds
are available to complete the contract and pay
subcontractors, suppliers and laborers.

Fidelity Bond:

A bond a business seeks to
protect itself in the event of a loss incurred
because of employee dishonesty or misconduct.
Some states require these bonds for businesses,
such as title insurance companies and credit
unions, that do business with consumers.

License and Permit Bonds:

Statutes and
regulations require these bonds if a company
seeks to obtain a license or permit in a state
or local jurisdiction. If a principal violates its
obligations, this bond pays the obligee or
other third party.

Miller Act:

Law passed in 1935 that requires
performance and payment bonds for federal
construction projects over a designated
amount, currently for contracts over $150,000.

Money Transmitter Bond:

A surety bond that
guarantees money transmission companies
offer services in compliance with state or local
statutes and regulations.

Mortgage Bond:

A type of commercial surety
required by a state or local regulatory agency
for mortgage brokers to become licensed in
that state.


The entity that requires the bond
and is protected if there is a loss or default.

Payment Bond:

A bond given by a contractor
to guarantee payment to subcontractors,
laborers and suppliers for work performed
under the contract.

Performance Bond:

A bond that guarantees
performance of the terms of a written contract.


Required by a surety company
from the principal for the issuance of a bond.
Performance and payment bonds come with
a one-time premium that typically equals up
to 2 percent of the contract price.


Also called “obligor.” This is the
party who seeks the bond and is bound by the
underlying obligation.
Reclamation Bond: Required by a state
regulatory agency, such as the Department
of Environmental Quality, for a business that
seeks to mine or perform related activities on
public lands. These bonds provide a financial
guarantee that the public lands mined will
be restored.

Subcontractor Bond:

A bond that a general
contractor may require of a subcontractor,
which guarantees the subcontractor will
perform work in accordance with the terms of
the contract and will pay for certain labor and
materials under the contract.

Subdivision Bond:

Developers must get this
bond from a surety if they plan to develop a
plot in a municipality to sell lots or homes.
Local development authorities require
these bonds, which guarantee a developer’s
obligation that the project will adhere to state
and local statutes and regulations, before they
issue a development permit.


Third party that issues the bond to the
principal and is responsible for fulfilling the
claim in the event of a default or loss.

Surety Bonds:

A written agreement where a
surety obligates itself to a second party, called
the obligee, to answer for the default of the
principal. In the case of public works contracts,
the obligee would be the state agency and the
principal would be the contractor.

New Jersey’s “Small Business Bonding Readiness Assistance Program”

Bid and Performance Bond


N.J. Governor Chris Christie recently signed legislation intended to give small businesses a boost by helping them get funding.

Bernard Fleischer and Sons/ supports this legislation to help minority owned businesses to be competitive and bid on State and Federal work. By offering programs of $250,000 and up for small businesses, we can help provide the confidence and bonding needed to be considered for such lucrative contracts.

The bill (S123) creates the Small Business Bonding Readiness Assistance Program within the state’s Economic Development Authority, which doles out millions in financing and billions in tax credits to businesses in the Garden State.

Christie signed the bill into law inside the African American Chamber of Commerce’s headquarters in Trenton. Bernard Fleischer and Sons/ is committed to helping to give minorities “greater access” to programs like these to help rebuild cities like Trenton, NJ.

The services are designed to provide support and assistance to small businesses seeking surety bonding by providing a better understanding about what surety underwriters are taking into consideration during the bond application process which is often missing when small businesses seek to satisfy bonding requirements on larger projects.

Bid and Performance Contract bonds are often difficult to qualify for and costly for smaller businesses. Along with The Small Business Readiness Assistance Program, Bernard Fleischer and Sons/ can help small and minority owned businesses navigate the process.

We can help you grow your knowledge even further and supply competitive bond premiums to enable your business to qualify for profitable government projects. Visit us at to learn more or call 1.800.921.1008 and speak to our informative bond underwriters.


T: 212 566-1881 ext.110


Motor Vehicle Dealer Bonds F.A.Q.



Q. What Is a Motor Vehicle Dealer Bond?
A. It is a guarantee that motor vehicle dealers will follow the regulations of their state, and is usually required to obtain a dealer license.

Q. How much does a motor vehicle dealer bond cost?
A. The cost is a percentage of the bond amount. You can call us at 800.921.1008 for a free estimate. If you require an exact price, please complete a motor vehicle dealer bond application and receive the free bond quote.

Q. Can I get a motor vehicle dealer bond with bad credit?
Yes. We have great high risk markets and can get you approved for a new & used motor vehicle dealer bond regardless of bad credit. To learn more, visit our bad credit bond general information page and complete the EZ application.

Q. How to Get a Bad Credit Motor Vehicle Dealer Surety Bond.
A. We have access to many exclusive programs, allowing those with bad credit to get approved. However, the price will be considerably higher compared to standard markets.

Q. How long does the application take?
A. We approve motor vehicle dealer bonds instantly online. The application process takes just minutes. You can get a no obligation online quote on our website at any time.

Q. My friend is an auto dealer. Will my motor vehicle dealer bond cost the same as theirs?
A. Possibly, but the rates vary based on the estimated risk and the ability to repay claims. As a result, your pricing could be lower or higher depending on your risk compared to the other dealer.

Q. How does a motor vehicle dealer bond protect my dealership?
A. It doesn’t. Motor vehicle dealer bonds protect the public from auto dealer fraud. A claim on your bond must be paid back by the dealer to the bonding company. You need to obtain insurance to protect your dealership.
Q. Do I need a motor vehicle dealer bond for selling mobile homes?
A. Very likely, many states require you to obtain motor vehicle dealer bonds to sell various types of mobile homes, including RV’s, manufactured homes and modular homes. However, every state has its own requirements.

Q. Do I need new AND used motor vehicle dealer bonds for selling new & used vehicles?
A. Usually no, one motor vehicle dealer surety bond generally covers both new and used vehicle dealers. However, motor vehicle dealer bond requirements vary by state.

Q. How is a motor vehicle dealer bond different from car dealer insurance?
A. Bonds are a form of credit to motor vehicle dealers and assurance for the public. They guarantee that a dealer will not break the state laws. Should they break laws and cause a claim on the bond, the motor vehicle dealer is responsible for any damages. Motor vehicle dealer insurance protects the dealer from loss, not the public.

Q. How much does a Motor Vehicle Dealer bond cost?
A. Costs vary by bond size, applicant, bond form, state and the bond agency chosen. BF Bond only reviews the personal credit of the business owners. Nearly all other bond agencies will review business and personal financials, experience, bank balances and years in operation, in addition to personal credit. Visit our website and get an estimate, or apply to get approved instantly online.

Get the Motor Vehicle Dealer Bond You Require.
A motor vehicle dealer bond allows you to sell vehicles to the public and other dealers/wholesalers. A wholesale dealer bond only allows you to sell vehicles to other dealers and wholesalers.
A motor vehicle dealer bond applies to retail and wholesale dealers, and only one bond is needed to sell new and used vehicles. Whichever type you need, you can conveniently apply online for all motor vehicle dealer bonds.

For more information contact Jose Ward at 800-925-1008, email or visit us at

Renewing your bond? Renew with us, the insurance and bonding agency worth recommending since 1949

businessman with a clock

Many surety bonds are issued on a fixed term but there are some bonds with specific expiration dates set by the obligee, so it is important that you’re aware of when you are required to renew your bond. There are many bonds that expire on December 31st every year so to avoid a lapse in coverage and potential punitive action make sure to check your bond type and its expiration date.

It is highly encouraged that all surety bond renewals are done before the current term has ended. That way, there is considerably less chance of any issues that could result in a lapse of coverage. Keep in mind that by waiting until the last minute, if there is a lapse in coverage due to the principal’s failure to renew on time the principal may find themselves without the bond coverage necessary, which may result in penalties.

This is especially true for renewals due at the end of the year during the holiday season, when many local government and state offices have more limited hours of operation. We offer surety bonds in all 50 States with a quick and convenient application process to avoid delays. For further information on our surety bond products visit us at, call us at 800.921.1008 or get an application here.

What is the difference between the Administrator of an Estate and an Executor of an Estate?

(And why they both should be bonded)

A short answer is that an Executor (Executrix if a female) is the person whom is named in the Will to take charge of the estate.  The Executor is responsible for wrapping up the deceased person’s affairs and distributing the assets to, or for the benefit of, the persons named in the will (beneficiaries).

An Administrator is the person in charge of the estate when my someone dies without a Last Will and Testament.

Both the Administrator and Executor are subject to the jurisdiction of the Probate Court. Both have similar duties. Selling properties, paying taxes, gathering and dispersing assets.

Administrators and Executors are fiduciaries. A fiduciary is a person who has been given the highest degree of trust and responsibility that can be imposed by law.   Both must answer to and be accountable to the probate court. They must act in a fiduciary capacity with the settlement of the estate in the best interest of the estate. Their role as liquidators should have the best interest of the estate in mind when dealing with any person, property, interest, trust, or savings.

The most significant difference between an Executor and an Administrator is that an Administrator’s authority is limited to what the law provides in the statutes. The Executor has all the same legal authority PLUS additional powers that may be granted in the Last Will and Testament.

The Last Will and Testament can give the Executor the power to sell real estate at private or public sales without having to go through the courts, this saves time and money.

In the end, trust is key. Money and power without checks and balances can influence a person’s judgments.  This is why a BOND is so important.  A bond holds accountable the person and gives the heirs confidence this Executor or Administrator will be honest and proper when dealing with the estates money and business.

To learn more visit us at and live chat with a knowledgeable Bond professional or call us at 800.921.1008 to speak with someone regarding you particular situation or apply here.




Would a crime policy cover this?

A Strange way of stealing Gold from the Royal Canadian Mint. Via the Anus?!

goldbullion1717128The case against Leston Lawrence, 35, in an Ottawa courtroom presided over by Justice Peter Doody on a number of smuggling-for-cash charges may seem like a joke, but the risk of employee dishonesty is all too real. Mr. Lawrence is accused of theft, laundering the proceeds of crime, possession of stolen property, breach of trust and he was fired from the Mint. Would a Fidelity Crime Bond cover this?

During testimony it was revealed that Mr. Lawrence set off the metal detectors more often than the other employees (Except for the ones with medical implants), requiring manual scans using a metal detecting wand but they never seemed to find anything on him. Investigators say that he used Vaseline and rubber gloves that they found in his work locker to aid in smuggling the cookie sized pucks of gold.

Four of the pucks were found in a safe deposit box owned by Lawrence and he had sold 18 of them for approximately $6,800 each from November 2014 to March 2015. Subsequently, an obviously dedicated security employee tested the idea that the pucks could be concealed in an anal cavity and not be detected by the wand.

Curiously, the mint never noticed any gold missing. After a bank teller noticed Mr. Lawrence had been cashing several checks from a gold dealer and then transferring the money out of the country is when the teller looked up the man’s place of work and alerted the mint to the suspicious activity.

Jaw dropping statistics from the ‘Statistic Brain’ website, trusted research provider for Forbes, CNN, ABC News, and many others reveals that the amount stolen annually from U.S. businesses by employees is $50,000,000,000 and 7% of annual revenues are lost to employee dishonesty and fraud.

Although a minority of employees becomes dishonest, they can rationalize their theft in many ways: ‘the company won’t miss it,’ ‘they’re not paying me enough,’ or the person succumbs to gambling or some other addiction. Protecting a business with a Fiduciary bond aka Crime bond or Fidelity bond is the most effective way of preventing these losses. The definition on a Travelers Insurance policy for Employee Theft reads

“The Company will pay the Insured for the Insured’s direct loss of, or direct loss from damage to
Money, Securities and Other Property directly caused by Theft or Forgery committed by an
Employee, whether identified or not, acting alone or in collusion with other persons”

In addition to the employer being protected from covered losses due to theft and forgery, the exact definition of “who” is covered is defined in the policy, but should include all current or former employees, partners, members, directors, volunteers, trustees, seasonal employees and temporary employees. If the mint had one of these bond policies they would be insured against the conservatively estimated $180,000.00 loss.

Some of the typical exclusions to these policies are accounting or math errors, vandalism, Governmental action, restatement of a profit and loss statement and theft by the employer itself. You cannot steal from yourself; however coverage extends to partners, directors, members, and trustees.

To learn more about fiduciary bond products or any other types of bonds visit our website at, our blog at , call us at 800.921.1008, or email with your inquiries or APPLY HERE.

When is a Guardianship Bond Required for Minors and the Incapacitated?

wheelchair-1371832238rybBack story; A couple is married for over 40 years with no children when the wife becomes incapacitated by Alzheimer’s. They own rental properties in addition to their residence. They have accumulated savings accounts and brokerage accounts and all of their assets are community property. If the husband dies suddenly, the wife in her mental state, does not have the “capacity to contract”, meaning she cannot consent or participate in any transaction dealing with the property or accounts. A court often times appoints a guardian of the incapacitated person to handle their estate for the purpose of the good of the incapacitated.

Guardianship Bonds, In the family of Fiduciary Bonds or Probate Bonds protects the ward’s interests from detrimental actions and mishandling by the guardian. The cost of Guardianship bonds are a fraction of the surety bond amount required by the assigning court.

How is the bond amount determined?  The amount is based on all the assets of the ward, including real estate holdings, bank accounts and trusts. When a Guardianship Bond is applied for, the surety bond company looks at the guardian’s personal credit score and other financial information. Almost all bonding companies require an attorney to stay involved to help handle the legal aspects of the transaction.

Call us to discuss your Fiduciary, Probate, and Guardianship bond requirements. 800-921-1008


How can small contractors and their customers benefit from Performance Bonds and Surety Bonds?

keep-your-cool-during-a-home-renovationEver watch HGTV (Home & Garden Television) and witness the horror stories left behind by shady contractors? Things like homeowners without kitchens or baths for months. Police recently arrested 45-year-old Cary Grimm on charges of grand theft for doing just that. Customers say the contractor disappeared without completing the work that was he was contracted for.

One couple said their home remodeling project turned into a nightmare after a few weeks’ delay turned into a half a year battle. The complaints which total nearly $90,000 based on over a dozen complaints by customers that came in after Grimm exhibited at a local home show. How could a surety bond aka performance Bond have helped? These bonds ensure a contractor will perform work required in a contract or winning bid.

Bonds provide small contractors and customers with numerous benefits. The surety bond is a form of protection against contractor default due to faulty workmanship, late delivery or not using specified materials. The surety company helps the contractor avoid costly delays and contract disputes if the sub-contract defaults with their portion of the job by non-performance.  Then the surety company will intervene to fulfill the contractor’s scope of work. When a project is bonded, there’s also an added layer of payment protection for workers and suppliers of the contractor.

Surety bonds help level the playing field, and allow a small contractor to compete in the free market, leading to lucrative contracting opportunities. Consumers and businesses feel more secure when hiring a bonded contractor.  A contractor’s bond and insurance are important forms of protection for anyone who is taking on a construction project.

Furthermore; to avoid a Mechanics Lien, a Payment bond is suggested.  Using this Surety Bond as a tool, gives owners assurance that all suppliers and sub-contractors are paid. Also suggested is an Ancillary bond to guarantee that non-material or performance requirements of a contract will be met. An example would be compliance with special terms, laws or regulations.

Call us to discuss your Performance, Bid, Ancillary and Payment bond requirements.

visit call 800-921-1008 or email


New York Increases the surety bond amount for used car dealers.

bly9735cyw-2bpwhuljwgOn Sept. 29, 2016 Governor Andrew Cuomo signed into law a piece of legislation that will increase the surety bond amounts required for used-vehicle dealers to become licensed. Surety bonds help ensure that the Motor Vehicle Dealers  follow legislation and regulations in your state. Generally, obtaining and filing a surety bond is a normal part of the dealer licensing process in every state. Depending on your state the underwriting process can vary based on the Bond amount. In many cases a credit report is required for bond approval. In situations where the credit is less than favorable, we represent Surety Companies that charge a little more to issue the bond.

Currently applicants and used motor vehicle dealers in New York, who sell fewer than 200 cars in the preceding calendar year only need a $10,000 bond. Those who sell more than 200 vehicles, they need a $25,000 bond to become licensed.

The new New York State law will take effect on March 28, 2017. Motor Vehicle Dealers who sell fewer than 50 cars in the preceding calendar year, are required to purchase a $20,000 surety bond. Dealers who sell more than 50 cars will be required to purchase a $100,000 bond. Additionally, New Motor Vehicle Dealers license applicants will require to post a $20,000 surety bond.

Dealers bonded under current law will be required to comply with the new Motor Vehicle Dealers surety bond requirements when their bond is renewed, replaced, altered or extended. For more surety bond knowledge visit us at, download our application here or call us at 800.921.1008

In a former Swing State $5.5M embezzlement case, does your crime bond cover this?


An Indianapolis woman will learn her fate after admitting to six counts of wire fraud and money laundering in a $5.5 million embezzlement scheme.

No longer a swing state (The state typically votes Republican with an exception in 2008) Hoosiers will head to the polls as Kristi Espiritu will be headed to sentencing in U.S. District Court at 10 a.m. on Nov. 8. She worked at Network Storage Inc., a data storage company based in Indianapolis, from 2008 to 2014 as a bookkeeper.

Court records show that with access to the company’s bank accounts she used their money to pay for shopping trips to purchase luxury items such as diamonds, handbags, electronics, furnishings and travel. A common occurrence in employee theft losses. According to a plea agreement reached back in May she admitted to lying to company executives and falsifying books and payroll systems. Even the best managers,  can be over trusting and never spot check or have a system to verify the monies in their bank account to avoid crimes like this.

As a part of a plea deal she agreed to pay $5.5 million in restitution, if she can’t pay that amount before sentencing, federal officials will use asset forfeiture to recover the funds. If the company purchased a dishonesty bond to cover this crime, they would become whole and not be concerned if the employee had the monies to repay the theft.


Espiritu could face up to 20 years in prison and a $250,000 fine on four wire fraud charges, and 10 years in prison and a $250,000 fine on two money laundering charges. White collar criminals steal through position and influence and quite often get away with their crimes for many years before getting caught.

It is unsure whether Network Storage Inc. had a fidelity bond (aka Crime Bond, Dishonesty Bond) which is a form of insurance protection that covers losses incurred as a result of fraudulent acts by specified individuals, usually insuring a business for losses caused by dishonest acts of its employees. Learn how fidelity bonds and surety bonds from BF Bond provide your growing business with the protection you require. Visit us at to fill out an application or call us at 800.921.1008