Obtaining a surety bond in North Carolina requires that principals have the financial means to reimburse the bonding company for any claims paid to the obligee, which is the party requesting the bond. Principals need to have good to adequate credit to qualify for most bonds in the state.
Common types of bonds in North Carolina are construction bonds and license and permit bonds. Construction bonds, also known as performance bonds, allows contractors to submit work bids on government construction projects. Performance bonds are a form of insurance which guarantees that contracted work is performed and completed as agreed upon in the initial contract. Contractors who hire subcontractors often need a payment bond as a guarantee that subcontractors and suppliers working on the project are paid. If the contractor fails to complete the job, the obligee can file a claim against the bond company for losses.
In North Carolina, individuals conducting business in the fields of landscaping, insurance and vehicle sales must obtain a licensing and permit bond to operate legally. Licensing bonds are typically obtained by submitting an application through an industry licensing board or government agency. Surety bonds are also available from surety bond companies. Bond principals must cover all expenses related to legal claims, and indemnity agreements pledge personal or business assets.