License and Permit Surety Bonds are types of commercial surety bonds which are normally required by states and municipalities in order to obtain a license in a given industry. They seek to ensure that a licensed entity or business will perform its work according to a specific state statute or statutes which govern or regulate an industry. A bond will be required to go along with the license, so many types of individuals and businesses need this type of bond in order to operate. If the licensee fails to uphold the terms of the license, he or she may lose such license and face a possible claim or claims on their License Bond. If a claim is filed on the License Bond, the Surety will generally investigate it in detail prior to payment of any such claim. If it is determined to be a legitimate claim, the Surety will pay the claim as required. The Surety will then require the principal to reimburse them in the amount paid as well as legal fees incurred in the process.
Typically, a license and permit bond that is required by a municipality in order to do work there is approved and processed within 24 hours.