Maryland Surety Bonds

Maryland Surety Bonds Overview

Applicants for a business license in Maryland are frequently required to obtain a bond as part of their license application. Similarly, contractors in the state must also get certain bonds before they can even bid on certain public or federal construction projects.

Why are bonds required?

Surety bond agreements serve the purpose of guaranteeing that the bonded party, the bond principal, will comply with a certain set of conditions and obligations. Such conditions may include particular state laws and regulations as well as the general requirement of conducting business fairly and honestly.

Bonds further act as financial security for the parties that they protect, the bond obligees, which typically are the public and the state. If a principal violates the conditions of their bond agreement and causes losses to obligees, the latter may file a claim. The company that backs the bond will then usually extend compensation to claimants.

This is why bonds are required, in a nutshell. To learn more, see our detailed ‘What is a surety bond’ guide!

To get started with your surety bond application, see the table below to find the surety bond you need. Click ‘Apply’ and follow the instructions.

To find out more about Maryland surety bonds, scroll down to the next sections. There you can find information about the various types of surety bonds, how much they cost and how you can get bonded.

Types of Surety Bonds in Maryland

You can choose between three main types of bonds, depending on what you need a bond for.

• License and permits bonds are required for business licensing purposes
• Contract bonds are required of contractors who wish to bid or perform on certain construction projects
• Court bonds are required for the purpose of appealing a court decision or in cases when a court appoints someone a fiduciary

License & Permit Bonds

License and permit bonds are necessary for certain businesses as part of the licensing process. The purpose of these bonds is to serve as a financial guarantee for obligees that they will be compensated if they suffer financial harm, due to business malpractice, fraud or other misdeeds. In this way, these bonds protect the state and the public, as well as individual consumers.

Auto dealer bonds and freight broker bonds are among the most popular bonds obtained in the state. Many other businesses in the state also need to get bonded, so make sure to inquire with your licensing authority about the bonding requirements.

Contract Bonds

Maryland contractors will frequently be required to obtain contract bonds when they are about to bid on a construction project or perform work on one. These bonds are sometimes also required as a guarantee for subcontractors and suppliers that they will receive payment in a timely manner.

State and federal construction projects almost always require contractors to obtain contract bonds, as do many private project owners. Depending on the amount of your contract bond, there are two ways for you to apply. Find out how below.

Court Bonds

Court bonds are another type of bonds available in the state. Maryland probate courts and appellate courts are usually those who require individuals to obtain these bonds.

The function of these bonds is to either protect the appellate system from abuse or to provide guarantee to those who have their estates and assets being taken care of by fiduciaries and guardians.

If you have questions about any of these bonds or would like to speak to one of our surety bond experts before you get bonded, call us at 866.450.3412!

How Much Does it Cost to Get Bonded in Maryland?

Surety bond cost is based on a surety bond’s amount. The cost of a bond is usually a fraction of its total amount (its penal sum).

This amount is often set on a state level, although there are some exceptions, such as the $75,000 freight broker bond. Using the freight broker bond as an example, the cost of obtaining this bond will be a small percentage of $75,000.

Who determines the bond premium and how?

Premiums are determined by surety bond companies on the basis of an applicant’s financial status. The personal credit score is the criterion which sureties evaluate most thoroughly when setting a rate for applicants. This is due to the fact that the credit score is a reliable indicator of applicants’ financial health. Sureties also consider other indicators such as:

• Your personal financial statements
• Your business financial statements
• Your industry experience
• How long your business has been operational
• Other factors

Those applicants who have a high credit score are offered rates on their bonds which are between 1%-4% of the bond amount. But the exact amount of their premium depends on the bond they are applying for, as well as other factors.

What if I have a low credit score?

Those applicants who don’t have a credit score, or have a low credit score, usually have to pay slightly higher rates in order to get bonded. Such applicants pay rates that range between 5%-15% of the total bond amount.

Despite the higher rates, which are meant to offset the risk involved, bad credit applicants can qualify for increasingly better rates over time by improving their credit score and finances!

To get an estimate of your bond premium, use our surety bond cost calculator below!

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Surety Bond Cost Calculator

Bond Type Select Your Required Bond Auto Dealer BondCollection Agency BondContractor License BondDebt Collector BondFreight Broker BondMedicare/Medicaid BondMortgage Broker BondRetail & Professional Services BondSchool BondSmall Loan Company BondSports Permit BondTax & Utility BondTelemarketing BondTravel Agent BondAll Other License Bonds

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Check out our surety bond cost page for even more information on what influences the cost of your bond, and whether and how you can lower your premium.

How to Get Bonded in Maryland

Getting bonded in Maryland is quick and simple. Begin by following the appropriate application link and filling in the relevant form.

License bond application

To apply for a license bond, complete our online bond application. We will process your application within a short amount of time and get in touch to provide you with a free quote and more information on getting bonded.

Contract Bond Application

For contract bond applications, complete the online application by choosing the bond type you require. We will contact you to provide you with further details on how to complete the bonding process.

You can also call anytime at 866.450.3412, to speak to us about anything related to surety bonds. If you have any questions about a particular bond or need help with your application - our experts will be there.

Further Reading

About us:

Bryant Surety Bonds

Bryant Surety Bonds, Inc. is a surety bond agency based in Pennsylvania. Licensed in all 50 states and with access to over 20 T-listed, A-Rated bonding companies, we have the contacts, expertise, and top service to provide you with a hassle-free experience, all while offering competitive rates for your surety bond.