Surety bonds
The bond your license, contract or court order requires. Contractors, auto dealers, freight brokers, notaries and estate executors get bonded through us, with access to about 7,000 bond types.
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The short answer
A surety bond is a written guarantee that you’ll meet an obligation, such as following licensing law or finishing a contract. Three parties sign on: you (the principal), the agency or client requiring the bond (the obligee) and the surety company backing the guarantee. If the surety pays a valid claim, you repay the surety.
Bond types
About 7,000
Categories
License, contract, court, fidelity, notary
Self-serve
Online bond quotes for common bonds
Corporate offices
Texas and Georgia
Every bond names the same three roles. Knowing who’s who explains how claims and pricing work.
You, the business or person who has to meet the obligation. The contractor, the auto dealer, the notary, the estate executor.
The party that requires the bond and is protected by it. Usually a state licensing agency, a city, a project owner or a court.
The insurance company that issues the bond and guarantees you’ll perform. If you don’t, it pays the obligee up to the bond amount.
An insurance policy protects you and expects to pay losses. A surety bond protects the obligee, and the surety expects to pay nothing. If a valid claim is paid, you owe the surety every dollar back, plus its costs. You agree to that in an indemnity agreement when the bond is issued, and on larger contract bonds the owners may sign personally.
That’s why bond underwriting looks like credit underwriting. The surety is lending you its guarantee. For small license and notary bonds, the premium is a flat fee with little or no review. For contract bonds, the surety looks at your financial statements, work history and backlog before it sets a limit.
It’s also why a bond doesn’t replace your liability coverage. A contractor’s license bond won’t pay for property damage your crew causes. That’s general liability, and most contractors need both.
These five categories cover nearly every bond request we see.
Required by a state, county or city before you can get or keep a license. Contractors, auto dealers, mortgage brokers, freight brokers and many other regulated businesses need one.
Bid, performance and payment bonds for construction and public works. They guarantee you’ll sign at your bid price, finish the job and pay your subs and suppliers.
Appeal bonds, guardianship and conservatorship bonds, and probate bonds for executors and administrators managing someone else’s assets.
Employee dishonesty, ERISA and business services bonds. They cover theft by employees, including theft at a client’s home or office.
Required with a notary commission in many states. Texas requires a $10,000 bond filed with the Secretary of State.
Public work usually requires bonds by law. On federal construction contracts over $150,000, the Miller Act requirements in FAR 28.102 call for performance and payment bonds, each at 100% of the contract price. In Texas, Government Code Chapter 2253 requires a performance bond on public work contracts over $100,000 and a payment bond on contracts over $25,000 ($50,000 for a city).
A bid bond comes first. It guarantees that if you win, you’ll sign the contract and provide the performance and payment bonds. Private owners and general contractors increasingly ask for bonds too, especially on larger commercial jobs.
Contract sureties set a bonding line, the largest single job and total backlog they’ll support. Smaller contractors can often qualify through credit-based programs up to $1 million without full financial statements. Contractors who want to know their capacity before bidding can request a pre-qualification letter through our online bond quote tool.
1
Send the bond type, the amount and who’s requiring it. A copy of the bond form or the obligee’s instructions saves time.
2
License, permit and notary bonds often need only an application and a credit check. Contract bonds need financial statements and a work history.
3
You pay the premium and sign the indemnity agreement. Most bonds renew yearly; contract bonds run for the project.
4
We issue the bond and help you file it with the obligee, whether that’s a state agency, a court or a project owner.
Most bonds cost a percentage of the bond amount, set by your credit and the bond type. Small license and notary bonds often carry a flat premium. Contract bonds are priced on the contract value and your financial strength. Tell us the bond and the amount and we’ll quote the actual premium.
Often, yes. Many license and permit bonds are available to applicants with weaker credit at a higher rate, and some sureties specialize in that market. Contract bonds are harder because the surety relies on your finances. We’ll tell you which sureties will consider your file before you apply.
It means the business holds the license its state or city requires, has the surety bond tied to that license, and carries liability insurance. The bond protects the public if the business breaks licensing rules. The insurance pays for injuries and property damage the business causes. They’re separate, and most licensed trades need both.
The surety investigates the claim and asks for your side. If the claim is valid and the surety pays it, you must repay the surety under the indemnity agreement you signed. Resolving a valid complaint directly with the claimant is usually cheaper than letting the surety pay and reimbursing it later.
Many license, permit and notary bonds can be issued quickly once you apply, sometimes the same day. Contract bonds take longer, especially your first one, because the surety reviews your financials and work history. Start before your bid date or license deadline.
Online Bond Quote
Open our bond portal, search for the bond by name or by the agency requiring it, and answer the application questions.
General & Professional Liability
General liability insurance pays when someone outside your business says you hurt them or damaged their property.
Commercial Trucking Insurance
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