Michigan Surety Bonds Overview

If you are looking to start a business in Michigan and require a business license, you are likely to also need to get a surety bond. Similarly, to work on certain state construction projects, you may also be required to get bonded prior to commencing work.

Why are bonds required?

Surety bonds are agreements that function as a guarantee that the bonded party (the bond principal) will comply with certain conditions. Typically, such conditions include complying with state laws and regulations that govern how business is conducted. For contractors, bonds guarantee their compliance with the construction contract, and that they will pay their subcontractors.

If a bonded party violates the bond agreement, anyone who is protected by the agreement (the bond obligee) may file a claim against the bond to receive compensation. In such an instance, the surety that backs the bond may step in to resolve the claim and compensate claimants. Ultimately, though, it is the bonded party that is liable, and if a surety covers a claim it must be repaid in full by the principal.

Get a full picture about how bonds work from our detailed ‘What is a surety bond’ guide!

Read on to find out more about Michigan surety bonds, how much your bond will cost and how you can get bonded. If you already know what you are looking for, just scroll through the table below and follow the application link to receive a quote on your bond.

Find the Bond You Need

The table below contains a list of only the most popular surety bonds. If you can't find yours, fill out our online application and select "Not in the list".

Contractor License (No P&P Language) Bond Michigan Dept. of Licensing and regulatory Affairs Residential Builder and/or Residential maintenance Apply Now
Contractor License (No P&P Language) Bond Dept of Licensing and Regulatory Affairs Security Alarm Contractor Bond Apply Now
Contractor License Performance & Payment (State) Bond Dept of Licensing & Regulatory Affairs Lic. Div. Residential Builder and/or Residential Maintenance Apply Now
Excess Weight, Other Highway & Street Permit Bond City of Detroit,County of Wayne, State of Michigan Uniform Bond Apply Now
Collection Agency Bond Bureau of Commercial Services, Licensing Division Collection Agency Apply Now
Collection Agency Bond Department of Insurance and Financial Services Non-Depository Sales Finance Company and/or Out-O Apply Now
Collection Agency Bond Department of Insurance and Financial Services Depository Financial Institution - Sales Finance C Apply Now
Professional Fund Raisers Bond Departent of Attorney General-Charitable Trust Sec Uniform Professional Fund Raiser Surety Bond Apply Now
Mortgage Broker (1st & 2nd Mortgages) Bond OFIR Mortgage Lender Apply Now
Mortgage Broker (1st & 2nd Mortgages) Bond Office of Financial and Insurance Services First Mortgage Broker, Lender, and/or Servicer Bon Apply Now
Mortgage Broker (1st & 2nd Mortgages) Bond Office of Financial and Insurance Regulation Mortgage Loan Originator - Individual Apply Now
Mortgage Broker (1st & 2nd Mortgages) Bond OFIR Consumer Finance Section Mortgage Loan Originator - Company Apply Now
Mortgage Broker (1st & 2nd Mortgages) Bond Commissioner, Office of Financial & insruance SECOND Mortgage Broker, Lender, and/or Servicer Apply Now
Mortgage Lender/Banker (1st & 2nd Mort.) Bond Office of Financial and Insurance Services Bond - FIRST Mortgage Broker, Lender, and/or Servi Apply Now
Mortgage Broker (2nd Mortgages Only) Bond Office of Financial and Insurance Regulation Second Mortgage Broker, Lender, and/or Servicer Apply Now
Defective Title Bond Michigan Department of State Vehicle Uniform Bond Apply Now
Defective Title Bond State of Michigan Manufactured Home Uniform Bond Apply Now
Auto & Mobile Home Dealers (New & Used) Bond Department of State Uniform Vehicle Dealer Apply Now
Auto & Mobile Home Dealers (Used Only, No New) Bond Department of State Motor Vehicle Dealer Apply Now
Motor Vehicle (Non-Dealer, Not Listed) Bond Michigan - Department of State Uniform Manufactured Housing Retailer's Bond Apply Now
Motor Vehicle (Non-Dealer, Not Listed) Bond Dept of Licensing and Regulatory Affairs Uniform Manufactured Housing Retailer's Consumer D Apply Now
Sport Permits Bond MI Department of Licensing and regulatory Affairs Unarmed Combat License Bond Apply Now
Detectives Bond Dept. of Licensing and Regulatory Affiars Security Guard Agency Apply Now
Detectives Bond Michigan Department of Energy, Labor and Economic Professional Investigator or Professional Investig Apply Now
Employment Agencies Bond State of Michigan Professional Employer Organization Bond Apply Now
Professional Licenses (All Other) Bond Michigan Department of State Information Purchaser's Uniform Surety Bond Apply Now
Professional Licenses (All Other) Bond State of Michigian Deferred Presentment Service Provider Bond Apply Now
Professional Licenses (All Other) Bond Michigan Dept of Licensing and Regulatory Affairs Alarm Business Bond Apply Now
Professional Licenses (All Other) Bond City of Lansing Door to Door Sales Bond (City of Lansing, MI) Apply Now
Schools (All) Bond Michigan Department of State Driver Education Provider Apply Now
Schools (All) Bond Mich Dept Energy, Labor, Economic Growth Office of Postsecondary Services - Proprietary Sch Apply Now
Schools (All) Bond State of Michigan-Board of Cosmetology School of Cosmetology Apply Now
Schools (All) Bond Michigan Department of State Basic Driver Improvement Course Sponsor Bond Apply Now
Alcohol (Manufacturers, Warehouses, Wholesalers) Bond Michigan Liquor Control Commission MLCC Non-Retail License Apply Now
Alcohol (Retailers) Bond MLCC - MICHIGAN LIQUOR CONTROL COMMISSION Retailer or Applicant for Retail License Bond Apply Now
Alcohol (Retailers) Bond MI Department of Licensing and Regulatory Affairs Special License for Sale of Beer, Wine, and Spirit Apply Now
Utility Deposit Bond Consumers Energy Bond Guaranteeing Payment of Utility Bills Apply Now
Money Transmitter Bond Office of Financial Services Money Transmission Services Provider Bond Apply Now

Types of Surety Bonds

The type of surety bond you require depends on what you need it for. Do you need a license bond in order to get your business licensed in the state or do you need a contract bond for a construction project? Consider the different types of Michigan surety bonds below.

License & Permit Bonds

Business licenses are often issued only under the condition that applicants obtain a license surety bond.

Such bonds guarantee that businesses will adhere to state regulations, such as the Michigan Administrative Code or the Occupational Code, that govern their license. They also guarantee that they will conduct business honestly and according to best practices in their industry.

Some of the most popular types of license bonds we underwrite in the state are the auto dealer bond, the mortgage broker bond as well as freight broker bonds. We also underwrite all other types of license and permit bonds in Michigan, depending on your business license.

Bond amounts for license bonds vary from state to state and from bond type to bond type. The auto dealer bond in the state has to be in the amount of $10,000, while the $75,000 freight broker bond has the same amount throughout the whole country.

If you are not familiar with how surety bonds are priced, don’t worry about these amounts. The amount of your Michigan surety bond is not the same as the cost of obtaining it. Have a look at the section below on surety bond cost in Michigan to understand the difference.

Contract Bonds

Contract bonds are required for bidding on or working on a construction project in Michigan. These bonds are a strict requirement under most federal and state construction projects and are also required on many private projects.

Contract bonds guarantee that contractors will comply with the conditions set forth in their contract with the project owner, and perform according to regulations. They may also, as in the case of the payment bond, guarantee that contractors pay their subcontractors, material suppliers and laborers in full, and on time.

Court Bonds

Court bonds are typically requested by courts. For example, a Michigan appeal court could request an appellant to obtain a court bond prior to being able to appeal a judgement. A probate court can also request a fiduciary or guardian to obtain a fiduciary bond.

Do you have questions or doubts about which bond you need? Feel free to call us at (866)-450-3412 anytime to speak to one of our surety bond experts and receive advice and guidance.

How Much Does it Cost to Get Bonded in Michigan?

The amount of your bond and the cost of your bond are closely related. The rate at which you can get bonded is equal to a fraction of the total bond amount.

Surety bond companies take into account the amount of the bond and different financial factors to accurately determine your bond rate. Depending on the type of bond (license, contract or court bond) fewer or more factors may be considered.

Which factors influence the cost of my bond?

For example, the Michigan auto dealer bond’s full amount is $10,000. This is the coverage amount that the surety bond company can extend to obligees if there is a claim against the bond.

The cost of your bond is the sum you will have to pay to obtain this bond. This cost is also known as your premium or your surety bond rate. To determine your rate, the surety bond company will most often first look at your personal credit score.

When determining the cost of your Michigan surety bond, a bond company may also want to assess your:

  • Financial statements
  • Industry experience
  • Your business’s overall stability
  • Other financial factors

If you have a high personal credit score, you will usually be offered a rate between 1%-4% of the total bond amount. These rates are called standard market rates. Applicants who have less than perfect credit usually are offered rates between 5%-15% of the total bond amount.

For a ballpark estimate of the cost of your Michigan surety bond, try our surety bond calculator below.

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Want to know more about what determines the rate of your surety bond? Make sure to visit our surety bond cost page.

How to Get Bonded in Michigan

Once you know what kind of bond you need, you can go ahead and get bonded. Getting your surety bond is simple and straightforward. Just follow one of the two links below, depending on the type of bond you will be applying for.

License bond application

To apply for a license bond, complete our online bond form. We’ll get in touch with you shortly to provide you with a free quote on your bond, along with further information on how to complete the application process.

Start your surety bond application today! Why us?
  • Quick turnaround - just 1-2 business days
  • Tailor-made advice on building a strong application
  • Exclusive bad credit programs

Contract Bond Application

If you need a contract bond, download and fill in the relevant online form, and forward it to us. Once we receive and process your application, we’ll get in touch with you to complete the next steps of the process.

Want to speak to one of our professionals? Call us at (866)-450-3412 anytime if you have any questions about the bonding requirements in Michigan!

Further Reading:


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.