The cost of a one million dollar surety bond will depend primarily on the type of bond you need, as well as your personal credit score. However, one thing is for sure: the bond does not cost a million dollars. Surety bonds are paid in premiums. For commercial bonds (i.e. license bonds), the premiums are normally between 1% and 5% of the bond amount. That means that a one million dollar bond, quoted at 1%, will cost $10,000.

Million dollar commercial bonds are a rare requirement. If you are currently looking for a bond of this size you are more than likely looking for either a Contract Bond or a Court Bond.

Million Dollar Contract Bond Cost

Smaller performance bonds are quoted at a flat rate, say 3%, and are most often approved with little more than a credit check of the applicant. When performance bonds become larger than $500,000, a much more detailed underwriting process occurs. After reviewing a company’s work history and financials the underwriter will offer the approval in a sliding scale manner. Here is a common sliding scale approval for a 1 million dollar performance bond:

  • 2% for the projects first $100,000
  • 1.5% for the next $400,000
  • 1% for the last $500,000

The above would give you a total premium (cost) of $13,500 for your 1 million dollar bond

As projects grow in size, rates will decrease. Here’s a cost example of a $7.5 Million dollar project:

  • 2% on the first Million Dollars of the project
  • 1.2% on the next 2 Million Dollars
  • 0.9% on the following 2.5 Million Dollars
  • 0.75% on the last $2.5 Million

In this scenario, total premium due would be $75,250 for your 7.5 Million Dollar Performance Bond.

Of course while both of the examples above are common approvals, your specific rates will be determined by your exact situation and qualifications and therefore could be somewhat more or less.

Million Dollar Court Bond Cost

Court bonds, like Contract bonds of this side, also have a sliding scale. For approval of a court bond of this size an application, personal financial statement, petition for the bond (court documents) and typically council are required. A common approval would look like:

  • 1% on the first $50,000 of bond coverage
  • 0.4% on the next $150,000 of required bonding
  • 0.25% on the next $300,000
  • 0.1% on the last $500,000 of bonding

In the above example, a well-qualified individual would see a total premium due on their Million dollar court bond of: $2,350

Most Common 1 Million Dollar Surety Bonds

Fidelity Bonds

Fidelity bonds, which are an optional type of bonding, are designed to protect business owners from certain actions of their employees, which might be detrimental to their business. Businesses whose employees have access to client property or funds often choose to get fidelity bonds as an extra precaution.

Performance and Payment Bonds

The total amount of performance and payment bonds is often the value of the contract. Thus, if you are working on a $1 million project, the total amount of your performance and payment bond will also likely be $1 million.

Court Bonds

Depending on the occasion which requires you to post a court bond (such as appealing a court decision), the bond amount required can sometimes be in the amount of 1 million dollars.

Money Transmitter Bonds

Licensing requirements for some money transmitters may include posting a million dollar surety bond to make sure they handle funds in accordance with applicable regulations. These states include New York, North Carolina, Colorado, Virginia and Texas.

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