What type of bond guarantees compliance with statutes and ordinances?

A license or permit bond is specifically designed to guarantee that the principal (the party obtaining the bond) complies with local laws, regulations, and ordinances associated with the issuance of a license or permit. This bond provides assurance to the public and the government that the bondholder will adhere to the legal requirements relevant to their business activities. If the bondholder fails to comply with these statutes and ordinances, the bond can be used to compensate affected parties or the government for damages or penalties incurred due to the non-compliance.

In contrast, a performance bond typically ensures that a contractor will complete a project as per the contract terms. A subcontractor bond relates to the actions of subcontractors, ensuring they fulfill their obligations. A labor and materials bond ensures that subcontractors are paid for labor and materials supplied, thus protecting suppliers and workers, but it does not focus on compliance with statutes and ordinances. Therefore, the license or permit bond is the appropriate choice to guarantee compliance with relevant laws.