What is a personal bond?

A personal bond refers to a surety bond that is executed by individuals rather than corporations or businesses to ensure the fulfillment of specific obligations. Typically, these types of bonds are commonly used in situations such as licensing, court appearances, or when an individual needs to assure the performance of a contract. The essence of a personal bond lies in the personal liability it entails, meaning that the individual providing the bond is personally responsible for the obligations it guarantees.

The other options describe different concepts that do not align with the definition of a personal bond. For instance, a bond issued solely for real estate transactions is more specific to real estate finance and does not encompass the broader use of personal bonds. Insurance policies for personal belongings are also unrelated, as they involve coverage of physical items rather than guaranteeing performance or obligations. Lastly, a financial agreement between two businesses may refer to a variety of business contracts or agreements but does not pertain to the nature of a personal bond as it lacks the personal obligation and guarantee characteristic of a personal bond.