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What is a Georgia Surety Bond?
A surety bond is a binding contractual agreement between three sides: a principal, an obligee and a surety. The principal is the side which needs to post the bond, while the obligee is usual the state government or a state agency, which requires it. The third side, the surety, backs the agreement and assumes responsibility in case the principal breaches the contract.
To find whether you need a Georgia surety bond, read on below about the different types of bonds in the state, what your surety bond rate will be and how you can get bonded.
Types of Surety Bonds in Georgia
Based on their purpose, surety bonds in the state can be separated into three main categories.
License and Permit Bonds
Chances are, if you are looking for a surety bond in Georgia, it falls into this category. License and permit bonds are required from businesses, which the state has decided to regulate through surety bonds. These bonds are required from a number of businesses as part of their licensing and license renewal procedures. In most cases they need to remain in force for as long as the business is active.
Auto dealers, contractors, freight brokers, money transmitters and telemarketers are just some of the professions which are required to post a surety bond. The purpose of each bonds depends is specific, but typically the purpose is to provide a safety net for both customers of the business and the state.
A contract bond can be required from some construction contractors, working on a public project owned or funded by the state of Georgia. There are several types of contract bonds. They protect against contract breaches, such as project incompletion, and provide a mechanism through which subcontractors, suppliers and laborers can get compensated in case of contractor default or non-compliance.
Many private construction projects may also required contractors to obtain a contract bond. Do not confuse contract bonds with contractor license bonds.
Sometimes required by businesses or individuals, these bonds serve different purposes. Fiduciaries or appellants in Georgia courts are often required to post court bonds as part of the requirements of appellate or probate courts and for the protection of the public.
How Much Does it Cost to Get Bonded in Georgia?
How much your Georgia surety bond will cost is determined on the basis of the bond’s full amount. Each surety bond has a total amount which puts a cap on the maximum sum of the claims that can be made against it. Out of that total amount, principals pay a premium, which in most cases varies between 0.75% and 2.5% where license bonds are concerned. A $25,000 surety bond, quoted at 1% would cost $250.
Here are the total bond amounts of some commonly required bonds in the state:
- Contractors license bonds: $25,000 (plus varying requirements by location)
- Used Car Dealer Bonds: $35,000
- Private Detective and Security Agencies Bonds: $25,000
- Mortgage Broker/Lender Bond: Starts at $50,000
- Appraisal Management Company Bond: $20,000
Factors that determine your premium
How much you pay to obtain your bond can vary depending on the type of bond you are applying for as well as a number of financial factors that the surety takes into account. Your personal credit score is one of the most important factors determining your surety bond cost. Other factors that sureties consider when determining your Georgia surety bond cost are:
- Personal and business financial statements
- Your personal industry experience
- How long your business has been operating
- Further financial and business factors
Bad Credit Surety Bonds
Most applicants who have bad credit will still be able to get bonded, though at a slightly higher premium - between 3% and 10%.
While this is mostly true for license bonds, contract bonds are considered too high-risk, which is why most underwriters don’t sign contract bonds for bad credit applicants.
To get a ballpark estimate on your Georgia surety bond, try our surety bond calculator in the right sidebar. If you would like to get a precise quote on your bond, follow the application link and you we will contact you with further details.
If you have further questions about how surety bond rates are determined, visit our Surety Bond Cost page, which will provide you with detailed information.
How to Get Bonded in Georgia
The application process is simple and straightforward. There are two different application forms, depending on what kind of bond you need to obtain.
License Bonds Application
To apply for a license bond, you can submit our 1-page online application. Shortly afterwards one of our surety bond experts will contact you with your free quote as well as further information about what else you need to do to get bonded. Depending on the bond you want, we may ask you to submit a few additional documents before issuing your bond. Applying takes only a few minutes.
Contract Bonds Application
To apply for a contract surety bond you have two possible options. If your contract bond is under $250,000 our Fast Track Program is the right one for you. If your contract bond is over $250,000 you will have to go through our Full Bond Line Project application.
To apply, just download the relevant online form and send it to us. We will contact you soon thereafter with more details about your bond.
And if you need to consult yourself with someone before you apply simply call us at (866)-450-3412. We pride ourselves with having some of the most knowledgeable experts in the industry who will be able to tell you everything you want to know about your Georgia surety bond.