What differentiates licensed Surety Bonds from unlicensed ones?

Licensed surety bonds comply with legal requirements, which is a fundamental distinction from unlicensed bonds. Surety bonds must adhere to regulations set forth by state authorities, ensuring that they meet specific standards of security and reliability. This means that licensed bonds are issued by companies that are authorized and monitored by government agencies, providing assurance that they will fulfill their obligations in the event of a claim.

The other options either misrepresent aspects of surety bonds or do not apply universally. While some licensed bonds might be more expensive due to their compliance and security standards, this is not a defining characteristic. The notion that unlicensed bonds offer greater coverage is misleading, as these bonds often lack the regulatory backing that protects all parties involved. Lastly, while certain projects may require licensed bonds, stating that they are required for all projects is inaccurate, as it depends on the type of project and jurisdiction. Thus, the key difference lies in the legal compliance provided by licensed surety bonds.