What does "continuous bond" mean?

A continuous bond is defined as a bond that remains effective until it is canceled by either the obligee or the principal, without a specified expiration date. This means that once the bond is established, it remains in force continuously, offering ongoing coverage and protection. Continuous bonds are commonly used in various contexts where ongoing compliance or performance is needed, such as construction projects, licenses, or permits.

The nature of a continuous bond allows it to cover multiple obligations over time, reducing the need for the principal to renew or replace the bond periodically. This feature provides convenience and assurance to the obligee that the bond conditions will be satisfied continuously as long as the bond remains active.

In contrast, other types of bonds may have fixed expiration dates, require annual renewals, or be related to specific projects rather than providing ongoing coverage. Therefore, the characteristic of being indefinite and remaining active until explicitly canceled is what distinctly defines a continuous bond.