Popular Surety Bonds in Chicago, Illinois
Overview of Chicago Surety Bonds
Three general types of surety bonds may be required in Chicago.
For businesses who need to obtain a license before they can perform work a license bond may be required by the City. Such bonds are needed by auto dealers, freight brokers, and telemarketers, as well as various types of contractors.
For example, the City of Chicago requires, among others, drainlayer, wrecking, and plumbing contractors to obtain bonds in varying amounts before they can get licensed and perform such work.
Once licensed, contractors who wish to bid on state or federal projects, as well as public works projects, may be required to obtain one or a number of contract bonds. Among these bonds are bid bonds, performance and payment bonds, as well as maintenance bonds.
The third type of bonds you might need are courts bonds. These bonds may be requested by Chicago courts in cases when a court judgement is being appealed or a person is appointed as someone’s guardian or fiduciary.
The purpose of all of these bonds is always to guarantee that bonded businesses and individuals will comply with the provisions of the Municipal Code of the City of Chicago or with state provisions and regulations that apply to them.
Every surety bond is conditioned to provide particular guarantees and when these are violated, a claim can be brought against the bond to demand compensation for damages or losses. Such compensation can be as high as the full amount of the bond.
First time getting bonded? See our detailed ‘What is a surety bond’ guide for full information on the subject!
In the sections below you can find out more about how much your bond may cost, how bond claims arise, and how you can get bonded.
If you want to know more about getting a bond in Chicago, feel free to call our bond professionals at (866)-450-3412 anytime!
Surety Bond Cost
The cost of your bond is a percentage of the full amount of the bond you are required to obtain.
Bond amounts differ. For example, plumbing contractors in Chicago need a $20,000 bond, wrecking contractors can either get a $20,000 or $40,000 (depending on the type of work they will be performing), and drainlayer contractors need a $50,000 bond.
The cost of either of these bonds will be a percentage of the full amount which is determined by the surety which issues and backs the bond. Sureties usually determine the cost based on applicants’ credit score, along with other indicators of their financial status and stability.
Since credit score is the most important factor, the higher your score - the lower your bond rate will be. For most bonds, applicants with a score of 700 FICO or above, can get bonded for about a rate of 1% or even lower. This means that you will need to pay $400 if you need to get a $40,000 bond.
To get a free quote on your bond, complete the surety bond application and we will shortly get in touch with you. There are no obligations attached to getting a quote.
Bonds With Bad Credit
If you have a low credit score and need to get a bond, you can apply for a bond through our Bad Credit Program!
Through this program all applicants who have lower scores can get bonded just as easily as those with high scores. The only real difference is that applicants with lower scores are typically required to pay slightly higher rates on their bonds.
Bond rates are determined on an individual basis, so if you want to get a quote, get in touch with us, and we will provide you with a quote!
Surety Bond Claims
All bonds are agreements between the bond principal (the bonded party), the bond obligee (the public or the state), and the surety bond company. These agreements are conditioned upon the execution or performance of a number of obligations on behalf of the bond principal. The violation of any of the conditions of the a bond may give rise to a claim against the bond and requests for compensation.
For example, according to §13-32-240 of the Chicago Municipal Code, the bond required by wrecking contractors in the city is conditioned to protect the city from any “loss, cost, damage, expense, judgment, or liability of any kind” that may arise as a result of a contractor’s actions and in particular any damage or loss that arise due to accidents to persons or property during wrecking operations.
If and when these conditions are violated by the contractor, a claim can be filed against their bond to provide compensation to anyone who has been harmed. In such a case, the surety backing the bond may extend as much as the full bond amount in compensation. In return, the bonded contractor will need to repay the surety.
This is how all bond agreements work - they are like a line of credit, extended by the surety when a claim against the bond arises. If no claim is made against a bond for the duration of its validity, contractors only need to pay the initial cost of bonding and nothing else.
Get Your Bond Now!
To apply for a bond or simply to request a free quote, complete our bond application form!
We will shortly contact you with your quote and additional details on completing your application. It will take about two working days for your bond to be issued.
Once your bond is issued, we will forward it to you via standard email, as well as provide you with a digital copy via email.
For any additional questions about bonds in Chicago, call us at (866)-450-3412! We will be happy to help out!