If you know what type of bond you need, pick your state on the map to see a full list of surety bond requirements by state. We have a national surety bond program that allows us to approve most applicants instantly online, regardless of credit. If you have been turned down for a bond previously, then be sure to read about our Bad Credit Surety Bond Program for commercial bonds. If you are unsure of what type of surety bond you require, then see our full list of surety bond descriptions.
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Surety bond requirements depend on the type of bond needed, your state, and your industry. At their core, bonds are a promise between you (the principal), the person or entity that requires a bond (the obligee), and the surety company. The bond acts as a guarantee that you'll fulfill your obligations to the obligee. If you don't, they can make a claim against the original bond.
A bond form lays out the requirements that you'll adhere to as the principal. This is a legally binding document, and all parties must agree to it.
Where you live impacts what bond coverage and bond amount you need. While the Code of Federal Regulations (CFR) details bond rules for some industries, state law determines many requirements and procedures. For example, court bonds and auto dealer bonds vary widely from state to state.
Additionally, certain states might require a bonded license while others don’t require licensure at all. In some cases, a state might allow you to use a letter of credit in place of a bond. It’s important to check with state licensing boards and local municipalities before beginning any business or project.
Government agencies require a bond if you're a construction contractor, freight broker, auto dealer, or mortgage broker. For example, the U.S. Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) requires at least $75,000 in broker bonds to obtain a broker authority in the freight industry.
In construction, the government might increase the bond requirements to match a higher contract price. Insurance brokers typically need a bond for their license, though some states don’t require a separate bond if the broker works for a bonded insurance company. Check your state law to be sure.
In addition, your industry might require the following types of contract bonds:
Once you've combed through security bond descriptions to figure out what bond you need, it's time to approach a reputable bonding company for the underwriting process. You can get a bond with bad credit but expect to pay a slightly higher premium. In general, you'll pay between 1% and 10% of the total bond cost.
The surety company will examine your credit history, financial situation, and personal character as part of a risk assessment. They'll look at how long you've been in business, if applicable, and at your past job performance.
Bond producers and bond companies specialize in guiding people through this process. If you're struggling to obtain the bond you need, they can often point you toward a bad credit surety bond program for commercial bonds.