A

Administrator Person with a legal right to act on behalf of an estate.

Application Form for providing information to underwrite a policy.

Attachment Legally taking a defendant's property.

B

Balance Sheet Financial statement of assets, liabilities and net worth.

Bank Depository Bonds Guarantees the deposit of public funds.

Bankruptcy Trustee Bonds Provides to the beneficiaries of the bankruptcy a guarantee that bonded trustees, named in a bankruptcy proceeding, will act following court rulings. Common types of bankruptcies are:

• Chapter 7: Liquidates a business by selling assets to pay debts.
• Chapter 11: Allows for the business to reorganize itself and pay debts.

Bid Bonds Guarantees a contractor will execute a proposal for the amount bid and with appropriate performance bonds.

Blanket Bonds Guarantees the honesty of all an organization's employees.

Blanket Position Bonds Guarantees the honesty of a list of employees.

Blanket Public Official Bonds Guarantees all public employees of a public organization.

Blanket Position Public Official Bond Guarantees the honesty of a list of public employees of a public organization.

C

Capacity The size of a bond a surety is able to cover.

Collateral reduces the risk a surety company assumes when issuing a bond for high risk principals or unusual obligations. There are many forms in which collateral may be provided, including cashiers checks, certificates of deposit or irrevocable letters of credit.

Commercial Bonds All bonds, except those classified as contract or performance, are commercial bonds. These bonds are usually required by law and are unique for each case.

Commercial Blanket Bonds Guarantees the honesty of all employees of an organization

Conservator Person or organization selected to protect the interests of a minor or incompetent.

Contract Bonds Guarantees the performance of a person or organization in fulfilling the terms of a contract. Most of these contracts are for construction, and the contractor must meet prequalification standards before being approved for the bond.

Cost Bond  Bond guaranteeing the payment of the cost of a trial.

Court Bonds Court bonds are bonds required by law.

D

Damages Damages are monetary fines.

Defendant In a court case, the accused person or organization

Defendant Bonds Guarantees that a defendant in a court case can pay, if a judgment is decided against them. These bonds often require the posting of collateral.  Usually required to counteract the effect of a bond that the plaintiff has furnished. Examples; Release of Attachment, Counter Replevin, Appeal, Supercedeas and Discharge of Mechanics Lien Bonds.

E

Employee Retirement Income Security Act In place since 1974, this act requires a bond of 10 percent of the value of pension and profit-sharing plans.

Errors and Omissions Insurance Covers damages resulting from negligence or mistakes that occurred in the course of doing business.

Executor Carries out the provisions of a deceased person's will.

F

Fidelity Bonds A bond that covers loss due to employee dishonesty.

Fiduciary Person appointed by a court to act on behalf of another, including the administration of an estate and the management of a trust or ward. Fiduciaries are often asked to post bonds guaranteeing their performance.

Fiduciary Bonds Guarantees the performance of a fiduciary. See fiduciary. Fiduciary bonds are sometimes referred to as probate bonds.

Funds Control If a contractor does not qualify for a bond, another party may obtain the necessary bond and be responsible for paying subcontractors and suppliers.

I

Indemnity Protection or security against loss or damage.

Indemnification Guarantees a second party repayment in the event of a loss or judgment against the first party.

Individual Bonds A bond written for a specific public official.

L

Large Deductible Plans Large deductible plans pay all losses in a claim, including the deductible. The covered party pays back the deductible to the insurance company on a monthly or quarterly basis. Deductibles for this kind of coverage typically range from $25,000 to $1 million per claim or larger.

License and Permit Bonds These bonds are required by a unit of government as a prerequisite for obtaining a license or permit. They guarantee that those government provisions will be carried out by the license- or permit-holder.

M

Maintenance Bonds

Guarantee that a completed project will meet its requirements for workmanship or materials for a specified period. These bonds may include a provision for "efficient or successful operation."

Minor Person not legally considered an adult. An adult may be named as a guarding for a minor.

Miscellaneous Bonds Any bonds that don't fit in an otherwise recognized category.

N

Name Schedule Bonds These list individual people and the amount for which they are bonded. These bonds are used for city council members or other groups of government officials.

Name Schedule Public Official Bonds These bonds use one bond with a list of names of the people and the amount for which they are bonded.

Notary Public Bonds Required by states to cover losses incurred by notary mistakes.

O

Obligee Person or organization to whom a service will be provided. A surety guarantees the service provider will perform for the obligee as expected.

Open Penalty Unlimited liability of a bond's surety.

Ordinance A municipal regulation.

P

Payment Bonds Guarantees payment by a contractor to subcontractors, laborers and suppliers involved in a project. Because liens may not be placed on public projects, a payment bond is an excellent assurance that all parties associated with a contract will be paid.

Penal Sum The dollar amount of the sureties liability under the bond. The amount may be fixed by statute, by contract or by the court.

Penalty The monetary size of the level of risk, and potential payment, associated with a bond.

Pension A regular payment.

Performance Bonds Guarantees a service provider will abide by the terms of a contract. They generally involve a payment bond for materials and labor and maintenance.

Plaintiff Person or organization who initiates a legal proceeding.

Plaintiff Bonds These are bonds required of the plaintiff in a law action. Typically guarantees to pay for damages to the defendant caused by the plaintiffs legal action if the court should rule in favor of the defendant. Examples; Attachment, Garnishment, Replevin, Indemnity to Sheriff and Injunction Bonds.

Position Schedule Bonds Similar to blanket position public official bonds, except that instead of attaching a list of the names of the insured people, there is a list of positions covered. This approach is used for organizations with high employee turnover and therefore reduces the paperwork required each time a person leaves the organization and a new one is appointed.

Premium The payment to have an insurance policy or bond.

Principal Bonded person, company or organization.

Public Official Bonds Guarantees a public official will act according the requirements of his or her position. The bonds are usually required by the unit of government the public official serves.

Public Official Person serving in a government position.

R

Rate Amount of money paid for each $1,000 of coverage.

Reclamation Bond Guarantees an organization will restore land after a project to its original state.

Replevin Legal action used to claim personal property.

Retrospective Plan Involves a premium payment based on incurred losses and an administrative charge.

S

SBA The Small Business Administration (SBA), which assists small- and minority-owned contractors secure surety bonds.

Self-Insurers Retention Plan Bond used for programs such as Workers' Compensation, general liability or other coverage where only limited or expensive are available.

Subdivision Bond Guarantees that a developer will make certain off site or public land improvements.

Supply Bond Guarantees the supplies or materials will be procured and delivered as specified in a contract.

Surety Person or organization guaranteeing the actions of another.

Surety Bond Guarantees a principal party will fulfill an obligation to an obligee.

Surety Industry The surety industry involves contract surety and commercial surety businesses selling coverage through agents and brokers.

T

Treasury Listing A federal limit on the size of federal bond a surety may write.

Trustee Person selected to manage an organization's funds and cooperate with creditors.

W

Work-on-Hand Reports Financial statement showing a contractor's work in progress.

Workers' Compensation Self-Insurers Bond Workers' compensation laws mandate that employers pay employees injured on the job. Organizations can meet their requirements by buying insurance or posting a bond guaranteeing that they can pay. Workers' compensation surety can involve a long period of exposure including these two statutory bond forms:

• Traditional-Bond Form: In this case, the surety must pay any workers' compensation claims filed during the time the bond is in force-even after the bond is cancelled.
• Last Surety On -Bond form: The surety incurs all liability for paying self-insured workers' compensation claims but is released from all liability if a replacement security is posted.