Overview of Railway Company Surety Bond Requirements

Railroad transporters who wish to use the infrastructure and railway services of railroad companies, by moving rail transport or other equipment through their facilities, are required to post a surety bond. Bonds like these may also be required of shippers in cases in which they make use of such railway companies’ transportation services.

Examples of such companies are Texas Burlington Northern Santa Fe (BNSF), Kansas City Southern Railway Company (KCS), Florida East Coast Railway Company (FEC). These bonds may be required by the companies anywhere in the country where they offer railway services. Bond amounts may vary, though typically the bond to be provided by transporters must be in the amount of $10,000.

These bonds guarantee that the bonded shipper or transport company will comply with their obligations as specified in their agreement with the railroad company. This includes conditions such as the punctual payment of fees and various others types of payments. It may also include, in the case of transportation services, the timely payment for such services.

If a bonded transport company violates the terms of such agreements, railway companies that experience losses due to such violations can file a claim against the bond. If the violations are found by the surety to have caused the losses claimed, the surety will extend compensation to cover them. Such compensation can be as high as the full amount of the bond.

Not sure what a bond is and why you need one? See our ‘What is a surety bond’ guide for a comprehensive explanation of the role of surety bonds!

Start your surety bond application today! Why us?
  • Quick turnaround - just 1-2 business days
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See the sections below to learn more about the cost of the railway company surety bond, how bond claims may occur, and how you can get bonded.

Call us at (866)-450-3412 anytime if you have any further questions about this bond!

Railway Company Surety Bond Cost

Both the BNSF and the KCS require a bond in the amount of $10,000 to be posted. The bond amount is not the same as the bond cost, though. The cost of your bond is determined by the surety on the basis of your credit score. In certain cases the surety may also review other indicators of an applicant’s financial strength, though credit score remains the most important one.

You can get a quick estimate of your bond cost through our bond calculator as well as from the table below. You can also receive a precise quote free of charge by submitting our bond form!

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Bond Cost Based on Credit Score
Surety bond amount Above 700 Between 650-699 Between 600-649 Below 599
Railway Company Surety Bond $10,000 $100-$150 $100-$250 $250-$500 $500-$750

Bad Credit Bond Program

Getting bonded with a low credit score can be complicated. Many sureties will reject applicants with low scores.

With us, applicants who have low credit scores can apply to get bonded through our Bad Credit Program. This program allows such applicants to get bonded as easily as applicants with high scores, at a slightly higher cost.

The increased cost for these bonds is due to the perceived higher risk for sureties that issue bonds for such applicants. By consistently improving their finances and credit score, in time applicants under this program can apply for a bond at standard market rates.

Learn more about getting bonded with a low score from the program page!

Surety Bond Claims

Railway company surety bonds require the bonded transport company to comply with their obligations as specified in the agreement they have with the railway company. Depending on the nature of the services that the transport company is receiving, the bond may require them to pay fees, storage, maintenance, and detention costs and charges, as well as taxes and insurance. If a transport company fails to comply with these and other obligations listed in their agreement, thereby causing losses to the railway company, the latter may file a claim against the bond.

The surety company that backs the bond must then investigate the issue to determine the nature of the violation and the amount of losses. If it determines the claim to be legitimate, it will compensate claimants for their losses up to the full amount of the bond. Any losses that exceed the bond amount will not be covered by the surety.

Once the surety extends the necessary compensation to a claimant, the claims process does not end there. Under the bond agreement, the bonded transport is fully liable for any claim that is made against their bond. This means that it must reimburse the surety in full for compensation it extends to claimants. To avoid such a scenario, full compliance with the surety bond agreement at all times is the best course of action!

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To start your bond application or to request a free and exact quote, complete our bond form! We will then contact you with your quote, along with further details about finalizing your application.

Once you’ve completed your application, it will take up to two working days for your bond to be issued. We’ll then forward it to you standard mail and email.

Start your surety bond application today! Why us?
  • The lowest possible rates
  • A 100% money-back guarantee
  • Access to specialty programs, not available to small agencies

Need more information about this type of bond? Call our bond experts at (866)-450-3412!


About the author:
Todd Bryant
Todd Bryant is a graduate of Germantown Academy and the University of Pittsburgh College of Business Administration Honors College. He has been President of Bryant Surety Bonds, Inc., an A+ rated Business with the Better Business Bureau, since 2007. Licensed as a producer with the Department of Insurance, he has been published in the National Association of Surety Bond Producers newsletter and on numerous authoritative publications such as The Washington Post, Entrepreneur.com, Azcentral.com and many more.