Types of Bonds

There are two types of bonds that a principal can put forward – a surety bond is a guarantee by a third party and a personal bond depends on the operator’s assets.

Surety Bond

A corporate surety bond consists of a promise by a principal and surety to the United States that the surety will correct any default should the principal not do so, paying up to the limits of the amount of the bond. A surety bond is a three-way contract between the principal, the surety, and the United States (and the State in the case of joint bond). 

When filing a joint bond with the BLM, the Surface Management Surety Bond form (Form 3809-1) must be used. Check with your state for forms that it may require.

Information Required on a Surety Bond:  

a.  Bond must be properly executed by the principal, including display of corporate seal (if available). The relationship of the signatory to the principal is to be shown on the bond form itself or in an accompanying document.

b.  Bond must be properly executed by acceptable surety, with the seal of corporate surety affixed, accompanied by the power of attorney (POA) showing proof of signing authority as surety’s representative. Surety bonds must be issued by a qualified surety (insurance company) approved by the Department of Treasury, Bureau of the Fiscal Service.

c.  Bond must be at least for the required amount.

d.  Principal and surety must be indicated in proper locations on the bond form. 

e.  The dollar amount must be spelled out, for example, Ten Thousand Five Hundred Fifty and no/100 Dollars ($10,550.00).

f.  Execution date on bond must be completed and date must precede the date of filing of bond.

g.  Power of attorney (POA) must show that person signing for surety had authority to do so on the date bond was executed. At the end of the POA, there should be a completed certificate indicating that the POA is still valid on a certain date.  This certificate must be dated the same date the bond is executed or within a few days thereafter.

Personal Bond

The principal may furnish a personal bond in lieu of a surety bond to ensure compliance with all the terms and conditions of a plan of operations on public land.

The BLM accepts three financial forms of personal bonds: Cash Bond, Letter of Credit (LOC), and Certificate of Deposit (CD).  The BLM Surface Management Personal Bond form (Form 3809-2) must accompany the financial instrument.  The dollar amount must be spelled out on the bond form, for example, Ten Thousand Five Hundred Fifty and no/100 Dollars ($10,550.00).   The personal bond form must be notarized.