A Bond is a guarantee between three parties. The three parties to a surety bond are:
The principal - is the one who is being required to obtain the bond.
The Obligee – is the one requesting the bond for financial security.
The Surety Company - guarantees the obligee that they will pay if there is a claim.
How the bond works:
The Principal and the Surety company stand “jointly and severally” (both 100% responsible) to meet the obligation of the bond.
The Principal and Surety are obligated to the Obligee. It is the Obligee, and most cases the general public who is protected and has the ability to claim on the bond.
It’s the Principals responsibility to pay all obligations that arise from their operations. If the Principal defaults on a claim, the Surety is obligated to pay on their behalf. They surety will then enforce the indemnity agreement to recoup their loss from the Principal.
The Price of the bond is determined by some key factors:
1. Commercial Surety - Lots of common license and permits bond for cities and counties can be approved with no underwriting starting at $50 a year.
There is also a good amount of state required license bonds, such as some motor vehicle dealer's bonds that get approved without a credit check and start at 0.5% so a $25,000 bond could start as low as $125.00 for a year. But that depends on the state and if there is a program.
If you are needing a bond that requires some underwriting the most common way, the rate is determined by credit score. Your score will determine what rate tier. Lastly if it's an uncommon bond then some additional information may be needed to underwrite. Apply Now
2. Contract Bonds, Payment and Performance Bonds have many variables that will affect the terms of approval. The average pricing is between 1%-5% of the contract amount for contracts under $750,000, for contracts $1,000,000 and above the rate starts to scale.. We have access to every major and tons of specialty underwriting programs. Regardless of your situation we will find you a market that will offer you terms. Fill out the following link and we will be able to give you terms, even if you are just looking to get approved for a line. Click Here
3. Fidelity and Business Service bonds start at $100 and go up from there, you will receive your approval and can purchase it at the end of the application process. Apply Now
4. Probate and court are fairly inexpensive if they qualify for standard markets, all are look at on an individual basis. Apply Now
There are two ways to get started:
Take a second and fill out a super simple application to get a free no obligation quote. Click Here
Or send us a quick note letting us know what you need and what questions we may answer. Contact Us
Here are the steps to obtain a bond:
1. Fill out the application
2. You will either get a quote automatically or one will be email to you during business hours.
3. Accepted the quote, make payment, and received your bond. Some approvals we will need signed paperwork and most bonds will need to be physically shipped.