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A surety bond is a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).

Simply put, a fidelity bond indemnifies a loss whereas a faithful performance bond guarantees the faithful performance of duties. Faithful performance of duties also, necessarily, includes fidelity and honesty to the public entity. A faithful performance bond covers the same dishonesty as a fidelity bond.

Here are some examples: Contract bonds ? protect from loss due to non-compliance with the contract e.g., bid bonds, performance bonds, payment bonds, warranty bonds. Commercial bonds ? guarantee compliance with law e.g., license and permit bonds, customs bonds, court bonds.

Interest earned on Utah municipal bonds is exempt from Utah income tax. Municipal bond interest is usually excluded from federal adjusted gross income.

There are two main categories of surety bond: Contract Bonds and Commercial Bonds. Contract bonds guarantee a specific contract. Examples include Performance Bonds, Bid Bonds, Supply bonds, Maintenance Bonds, and Subdivision Bonds. Commercial Bonds guarantee per the terms of the bond form.

Utah defines a lost or defective title as "insufficient evidence of ownership". If the value of the motor vehicle exceeds one thousand dollars ($1,000.00) then a surety bond will likely be required. Cars, trucks, motorcycles, ATVs, watercraft and trailers may be transferred by this bonded method through the Utah DMV.