Surety bonds provide financial guarantees that bondholders such as public officials, companies, contractors, or unions will uphold their contracts according to mutual terms.
Surety bonds protect WE THE PEOPLE from fraud and malpractice. When a bondholder breaks a bond’s terms, the harmed party can make a claim on the bond to recover losses.
The Performance Bond is the most common surety bond. This bond assures that the bondholder will perform and properly execute all the terms and conditions of an awarded contract or to fulfill his or her duties to the public as specified.
A public official is a person who holds a position of official authority that is conferred by a State, City, County or other municipality. They often hold a legislative, administrative or judicial position of sorts and is either elected or appointed. Relative to surety bonds, notaries public are the most common public official. A public official bond which provides indemnity for failure of a public official to faithfully perform their duties while properly managing funds they might oversee for the term of their designation.
Public Official Bonds may serve different functions: Fidelity Bonds and Faithful Performance Bonds. Also, states use “fidelity bond” and “faithful performance” interchangeably, there is a difference between fidelity coverage and faithful performance coverage.