Texas Surety Bond Guide

Texas Surety Bond Requirements

In Texas, professionals in many industries are legally required to obtain a surety bond in order to obtain a state license or permit, work on a specific project, or when required by courts. State and local laws mandate these bonds to protect consumers and guarantee compliance with applicable regulations.

Surety bonds are a legally binding agreement between three parties:

• The principal - the professional who is required to get a surety bond
• The obligee - the party requiring the bond, e.g. Texas Secretary of State
• The surety - the surety bond company that financially backs the bond on behalf of the principal

Below are the general types of surety bonds required in the state of Texas:

• License & Permit Bonds - These bonds are required for professionals such as contractors, auto dealers, and notaries as part of their requirements to legally operate in the state of Texas.
• Contract Bonds - Used in construction and project-based work to guarantee that contractors meet project standards, pay subcontractors, and complete work as agreed. Examples of such bonds are payment bonds, performance bonds, and bid bonds.
• Court Bonds - Required for various legal proceedings to ensure compliance with court orders and protect involved parties. Examples are supersedeas bonds and probate bonds.
• Fidelity Bonds - These bonds are not mandated by law in Texas but are often required by clients or contracts to protect against employee dishonesty, such as theft when working on client properties.

Most Popular Bonds in Texas

These are some of the most common Texas surety bonds, along with a brief description of who needs them:

• Auto Dealer Bond - TxDMV requires new and used car dealers to obtain a $50,000 surety bond as part of their licensing requirements.
• Contractor License Bond - Different types of contractors such as plumbers, electrical contractors, and other specialty contractors are required to obtain a surety bond. Requirements may vary between cities and municipalities.
• Freight Broker Bond - Freight brokers and freight forwarders in all states are required by the FMCSA to obtain a $75,000 surety bond as a type of financial protection for carriers and shippers.
• Mortgage Broker Bond - The Texas Department of Savings and Mortgage Lending requires mortgage brokers and mortgage lenders to acquire a surety bond. The bond amount is based on their servicing volume.
• Texas Title Bond - Required by the Texas DMV, this bond guarantees ownership of your motor vehicle when you don’t have a title. The bond amount is typically equal to 1.5 times the value of the vehicle.
• Notary Bond - The state law requires a 4-year notary bond in the amount of $10,000 in order to become a notary in Texas.

Bryant Surety Bonds offers all types of surety bonds in the state of Texas. Complete our online application to apply for the surety bond you need for your business. Our agents are here to help you.

The table below lists most of the surety bonds we offer in the state of Texas.

Surety Bond Requirements by City

Some cities in Texas have additional local bonding requirements. Here’s a quick overview:

• Houston: Requires a $50,000 auto dealer bond for new and used car dealers as part of the licensing process.
• Dallas: Contractors must post a paving bond to work on public streets and sidewalks.
• Austin: Contractors may need a contractor license bond to secure permits for various construction projects.
• San Antonio: Certain industries, like health spas, require a bond to guarantee compliance with city regulations.
• El Paso: Contractors may need a blanket building bond to cover multiple construction projects within the city.
• Fort Worth: Some professionals, such as solicitors, must obtain a vendor bond to operate legally in public spaces.

How Much Is a Surety Bond in Texas?

The surety bond cost in Texas typically falls between 0.5% and 10% of the total bond amount. The final price is determined by the surety bond underwriter and depends on several factors, including:

• Bond amount: The cost you will pay for the bond is a percentage of the bond’s total amount.
• Credit score: Applicants with good credit can expect to pay between 0.5%-3% of the bond amount. For example, a $50,000 surety bond may cost between $250 and $1,500 annually.
• Bond type: The specific type of bond required can influence the premium amount. For instance, certain businesses, such as freight brokers, could be considered higher risk due to the high number of claims associated with their operations, which can result in higher bond premiums. In contrast, lower-risk industries may benefit from more affordable bond rates.
• Industry experience: Applicants with extensive experience in the industry may be received as more reliable which could result in lower bond cost.
• Business financials: Strong financial statements indicate business stability and could lead to lower bond rates.

Can I Get Bonded With Bad Credit in Texas?

Even with bad credit, you can still get bonded in Texas. While high-risk applicants (those with no credit, low credit, or tax liens, civil judgments, etc.) may face higher premiums, Bryant Surety Bonds offers a special bad credit bond program, with rates ranging from 5%-15% of the bond amount.

This program provides bonding options for individuals with financial challenges, allowing those with lower credit scores to meet their bonding requirements. Over time, as applicants improve their credit score and financial standing, they can reapply and qualify for lower premiums.

You can get a ballpark estimate of your surety bond cost by using our calculator below.

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Surety Bond Cost Calculator

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Get Your Texas Surety Bond in 4 Easy Steps

1. Apply Online – Fill out our quick online form with your business details.
2. Get a FREE Quote – Receive your bond quote within minutes. Some bonds offer instant approval!
3. Pay – Securely pay your premium online.
4. Receive Your Bond – We’ll send your bond and our agents can also help you file it with the respective obligee.

Not sure about the specific bond requirements for your business in Texas? No problem—our agents are here to help you meet your specific requirements in any state in the US. Contact us today at 866.450.3412!

Agency License in Texas

Bryant Surety Bonds holds a legal license to issue surety bonds in Texas.

Agency License # 2431403

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.