Education Center

Educational Pages

What is a Surety Bond

A surety bond is a legally binding agreement between three parties - the obligee (the party requiring the bond), the principal (the party required to get bonded), and the surety company. It guarantees to the obligee that the principal will carry out their obligations according to their license or contract. The surety bond is put in place in order to protect the public and the party requiring the bond.

How to Get Bonded

If you are new to bonding, here you can learn the in’s and out’s of the bonding process as well as the most important piece of information you will need to provide in order to apply for your surety bond. This information will not just make the process smoother, but it can also help you reduce the cost of your surety bond.

What Does a Bond Cost?

The cost of a surety bond varies depending on several factors, such the type of bond, the state in which the bond is meant to serve, credit score and more. The actual cost that needs to be paid is a percentage of the total bond coverage and can be anywhere between 1%-15% of the bond amount (for most license bonds).

Surety Bonds vs Insurance

A surety bond is not an insurance. These are two completely different terms. An insurance protects your business, whereas a surety bond protects the public. If you want to get Bonded and Insured, the insurance aspect could refer to Fidelity Bonds, which protect your business from employee dishonesty.

Types of Surety Bonds

There are different categories of surety bond such as license bonds, contract bonds and court bonds. Find out all you need to know about them!

Surety Bonds FAQ

If you can't find the answers you need, visit our FAQ page where we try to answer all common and uncommon surety bond questions. We cover a few main categories of questions related to bond pricing, the application process, surety bond issuance, and bond renewals.

Surety Bond Rates

The surety bond rate is the percentage that needs to be paid from the total bond amount. Learn more about bond rates, the main factors determining your bond rate and how it varies across different types of surety bonds.

Getting Bonded and Insured

When starting a new business, one of the most important steps is getting bonded and insured. This page serves as an explanation for the process of becoming insured and bonded, however you can reach out to us directly with any additional questions.

Surety Bond Companies

Whenever you’re asked to obtain a surety bond, you will need to make sure it is backed by a reliable surety bond company at the best price possible. Getting bonded with the wrong company can cause higher annual bond rates, delays, or even leave you with a surety bond which is not backed. Learn more how to determine whether the company that supplies your bond is reliable.

Penal Sum of Bond

The penal sum of your bond, also known as the total bond amount, refers to the maximum compensation you may owe under the bond's agreement. The penal sum only applies if there is a valid claim against you.

Surety Bonds vs Bank Letters of Credit

Surety bonds have many advantages over a bank letter of credit, such as coverage, cost, duration and guarantee the completion of a project. Lean more about the difference between surety bonds and bank letters of credit.

State Surety Bond Forms Guide

Are you searching for a specific surety bond form? Read on how you can find the bond you need. If you still have questions, you can always contact us and we will be happy to help out.

Surety Bond Indemnity Agreement

It's a standard practice in the surety for the prinicpal to sign an indemnity agreement with the surety. The indemnity agreement guarantees that the surety will get reimbursed if it has to extend compensation to claimants on behalf of the principal.

Bond Rider

Sometimes principals need to change the information on their bond form, whether it's because they made a mistake or because there's a change that needs to be reflected, such as a name or address change. In cases like this, you need to get a bond rider.

Indemnity Bond

The term "indemnity bond" refers to a category of bonds condititioned upon one party's compliance with certain obligations or contract terms. Most types of license bonds fall in that category.

Financial Guarantee Bond

Financial guarantee bonds is an umbrella term for a category of bonds conditioned upon one party's paying taxes, fees, penalties and other finanical obligations to another party.

Recent Blog Posts

Categories

Latest Articles
Auto Dealers News
Freight Brokers News
Commercial Bonds
Contract Bonds
Court Bonds

How to Get Your Texas Contractor License: Step-by-Step Guide

To become a contractor in the state of Texas, you must obtain a license from one of the state or local licensing authorities. The Texas Department of Licensing and Regulation (TDLR) issues licenses to HVAC,

How to Get a Michigan Contractor License in 2020

To operate as а contractor in the state of Michigan, you will be required to be licensed. All types of contractor licenses in the state are issued and regulated by the Michigan Licensing and Regulatory

How to Get an Indiana Contractor License [Guide]

Anyone in the state of Indiana “engaged in converting construction material into real property on behalf of another person” is considered a contractor and must be licensed. This includes general, specialty, HVAC, electrical, plumbing, and

How to Get a New Mexico Contractor License [2020 Guide]

To get a contractor license in New Mexico, you must apply at the Regulation & Licensing Department’s Construction Industries Division (CID). While these licenses are issued and regulated by the CID, the application process itself

Education Center

Educational Pages

Recent Blog Posts

Still Have Questions?