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The Surety Bond Blog


“Why Do I Need A Surety Bond?”

Many people do not understand why they need to obtain surety bonds, let alone understand what they are. If you want to find out why you need a surety bond, you have discovered the right place.

An obvious answer to this question is because it’s being required of you (by the obligee). Why is the obligee requiring a surety bond of you in the first place? If no one is requiring a bond of you, you are looking for a fidelity bond, not a surety bond. Watch our video to learn more about fidelity bonding.

Surety bonds are required to protect the public. They guarantee obligations will be fulfilled, whether it’s a contract bond guaranteeing a public construction project will be completed, a license bond guaranteeing an auto dealer will abide by the laws or a court bond that guarantees a legal guardian will handle a minor’s finances properly. These specific examples are a small overview of the hundreds of surety bonds out there, but they all have one thing in common; they protect the public, not you.


You might wonder “how does paying for a surety bond guarantee anything or protect the public?”, and that’s a great question! When a surety company provides you with a surety bond, which you learned is a guarantee; they are vouching that you will follow the bond terms. If the bond guarantee is not fulfilled and damages are caused, a claim can be filed. Taking an example from above, if a contractor that was hired to make structural improvements to a building walks off the job before completion; a claim can be filed. The surety company will hire a new contractor to finish the project and pay the claim initially, but will come back to the bond holder for reimbursement of the claim, along with any additional costs incurred to get the rest of the job done. As long as you operate ethically and according to the bond terms, you have nothing to worry about, and the public has a layer of protection from the deceitful.

Now you know why you need a surety bond. If you still have questions, feel free to leave a comment below, contact a bond expert in our office or visit our education center to learn more about surety bonds.



Comments (70)

Category: Commercial Bonds, Contract Bonds, Court Bonds, General Bonding


70 Responses

    1. I am assuming you are required to post a bond for your dog due to it’s breed? We don’t write that line of business, but there are agencies that do.

      Try a google search for “surety bond dog”.

  1. What is a bond without surety? And why would I need one if the business is not open? Do you need one if a will is completed?

  2. Your question needs some rephrasing. Let me clarify…

    A surety, also known as a bonding company is who guarantees your performance, or "bonds" it. These bonds are referred to as surety bonds.

    As for court bonds, they are only required when deemed so by the courts, who are typically told what to do by state legislatures.

  3. I am thinking of starting a business where translators respond to the scene of a crime and translate info to police officers since there is no officer who speaks the language. Would I need to bond each translator? Any idea how much or what type?

  4. i am required to post an unemployment bond and yet if someone files for unermployment, i foot the entire bill. what purpose does this bond serve and how much should it be?

    1. It sounds like the bond is a financial guarantee to ensure you can cover the costs of the unemployment. If you default, the bond kicks in to protect the former employees. However, the bonding company will no doubt require indemnity agreements, meaning that they will come to you to for payment on any surety losses.

      This page might help to explain it all better: http://www.jwsuretybonds.com/info/videos/l1-what-

  5. my husband is out of jail on a surety bond. he keeps leaving the state. is this legal. if he had permission from te court, wouldn't it show on the court records?

  6. Why would the owner of a car lot need a surety bond? Especially if the bond is to protect the customer. It sounds like if anyone needs to be protected it would be me, not my customers, since they have my car that I haven't received full payment for yet.

    1. Jordan,

      It doesn't always work that way. A lot of times the bonds help to protect the public from fraudulent dealers. I have seen several dealers sell the same car to more than one person.

  7. I have supposidly won a contest and they want me to have a surety bond of 1% of the winnings to guarantee the delivery. I'm thinking they are the ones that should have the bond? If it is my winnings, why would I need this?

    1. Paula,

      You are absolutely right. Surety bonds for raffles guarantee that the prize will be awarded and they aren't just selling tickets.

      Send them here if they are confused and I'll try to help!

  8. I plan to get Surety bond for my 1985 Grand Prix Pontiac and my home how would I start this process please detail your reply thanks

  9. I'm wondering what the difference is between a surety bond and a notary bond. I already have a notary bond and I'm looking to start a freight broker business. Not sure what that all entails.

  10. The state of MA is requiring me to get a surety bond. I'm trying to claim stocks that the state is holding of my deceased mother. Why is this needed?

    1. Judi,

      I have heard of such a requirement, but have not ran into one in years. Also, I should mention, this is one of the few surety bond types our agency does not write.

      I believe you are being required to post the bond to ensure you are the rightful owner. It is possible anothe relative could surface to say they are due some of the stock ownership as well.

  11. I own a Jazzercise Fitness Center and I am wanting to sell a 1 year membership. I live in KY and have been told I need to be bonded. What type of bond do I need to get?

  12. I own and operate a housecleaning business (no employees). If my customers do not require one of me, do I need a surety bond covering theft? What would it accomplish? Especially since I know there would not BE theft, but I guess there is always the possibility of an accusation. As a well-established business, I am starting to think that the bond we have maintained is now unnecessary.

    1. Joe,

      Just to clarify…since no one if requiring the bond of you, it is NOT a surety bond. You have a fidelity bond in place, a type of insurance that should really be called "fidelity insurance" to lessen confusion.

      Fidelity policies usually only pay out if there is a conviction. Therefore, I think the only thing it is providing it peace of mind to your clientel.

  13. Hi,

    I am thinking of opening a Hard Money Lending Business. What bond would I need for the borrowers? Can I get such a bond?

    1. Chris,

      That type of loan is guaranteed by real estate assets, no? Regardless, bonding companies won't have interest in making that kind of guarantee.

      There may however be a bond requirement for your company by the states you choose to operate in. The bond would be in place to protect your clients from your company, not the other way around.

      Let me know what states you plan to operate in and we can help guide you.

  14. I'm starting a modeling/talent agency in the state of Florida, no employees, just ICs. As per license requirements in the state for a talent agency, it says a $5K surety bond is needed. As I'm researching, it seems these are most common for contractor/commercial roles, where a 'job' could take weeks/months, where my services are provided in a matter of a day or two. Is this $5K bond really necessary, and do I have to pony up $5K annually or one time? Thanks!

    1. Hi Vicki,

      Before you get started, you may want to check with the to see if you are required to post the bond or not. Bond premiums are always fully earned the first year, which means no refunds on cancelled bonds so it is important to ensure you are required to obtain the bond.

      The Florida Talent Agency Bond will not require you to post $5,000 cash. You would pay a percentage of the bond amount as your annual premium.

      Our website will actually allow you to get approved and pay online within minutes.

  15. I already have a surety bond for my father's estate as executor…why do I need to renew it every year??

    1. The bond guarantees your faithful execution of the estate. The surety incurs liability each year that you are handling the estate. Therefore, new premium is required each year.

  16. If the auto dealer was fraudulent to many customers and is arrested and asked to post a $5K surety bond how do the customers end up getting their money back. This was a case where the auto dealer sold the same car to several customers

  17. Sandy,

    If the 5K bond is a bail bond, you will need to pursue them legally.

    If it's an auto dealer bond, you will want to find out which bond company wrote their bond and contact them to file a claim on the dealer's bond.

  18. A bank is asking me for a bond in order to receive unclaimed property.
    Why would you need to bond with a bank, if they hold unclaimed property in your name?

  19. I am starting a medicaid transportation company and the company who sends out the business or clients is requiring a surety bond. What kind is this

  20. Medicaid transportation business. What type of bond is needed and also I was told I need the amount to be 25000. What is the cost of that?

  21. I am going to do lawn mowing work for my subdivision and they will be paying me $40/wk. They are wanting me to provide proof of insurance and bond. I am not a business, just a homeowner trying to help out. Also, I own this land, which is considered open space. Is this legal? BTW will not be making any profit from this if that matters.

    1. Bob,

      It sounds like they may want you to obtain a fidelity bond or a private type of bond, which we don't handle. You can obtain those at a local insurance agency.

      Contact the subdivision to find out exactly what type of bond they are requiring of you.

  22. I want to buy and sell cars for profit. In FL I can only do this 3x before needing a dealers lic. I need a $25000 surety bond. What does this mean? Do I have to fork over $25000 to the state just to sell cars on the side? That seems a bit strange.

    Thank You

  23. What type of Bond is needed for a property preservation/trashout cleaning service in NY/NJ and what type of insurance is needed.

  24. i have been told i need a surety bond to refinance my double wide because it was never registered or titled. There was a title company company involved in the original sale of the double-wide in a land-home agreement. But why do i need a surety bond to refinance 10years later?

  25. My wife is the legal guardian of her artistic son, age 27. She is required to pay $50.00 per year on a $8,000. Her question is why is this necessary since the court has awarded her legal guardianship.

  26. Hello,

    I want to take a loan from someone to invest in a business they want a 5% surety bond on the amount of money that they would be loaning me.

    How does this work? Is the loaner responsible for the paper work? Do I get that 5% back or is it just a form of collateral?


  27. hello. I’ve been ordered in court to obtain a surety bond in the amount of $2,500 visitations with my son are suspended until I do. the bond is to ensure I keep my minor child away from one individual. I’m unsure about how to get this type of bond and every company I call is clueless to what I’m talking about. please help me by explaining what this is and how I can get one. I need to know also if there is a way to do this inexpensively. this is in Oklahoma. thank you.

    1. Sam,

      I just spoke to our court bond department, and they have never heard of anything like this.

      Your best bet is to contact the court and determine exactly which type of bond they are requiring of you.

  28. Awe Inspiring Pieces

    My brother recommended I would possibly like this blog. He was once entirely right. This post truly made my day. You cann’t believe just how much time I had spent for this information! Thank you!

  29. I bought a car and lost the title, i have to get a bonded title. My question is if i get a bonded title and pay for a surety bond on it, will i get the money back?

  30. Lila Livingston

    I thinking about having a data services business where I would be inputting data, filing and stuffing envelopes for them. Will I need to be bonded? If so, where do I go to get license.

    1. Lila,

      It would be best to contact your state directly to determine:

      1) If obtaining a license is a requirement for your line of work, and how to obtain one if it is required (as every state has a unique process)

      2) Whether a surety bond is required to obtain the license/operate legally

      Let me know if you have any other questions.

  31. My son in-law is executor of his mothers estate. He needs me to sign a surety bond for him… Is this common practice and what does it mean for me?? thanks

    1. Hey Carol,

      Who told you that you needed to sign the bond? Your son in-law will have to sign the bond as opposed to you, as the bond is a guarantee he will handle all responsibilities as an executor.

      Let me know if you have any other questions.

  32. I filed an appeal in court for a decision . They are asking for 99.000. vet bills. Do I have to post a bond for this. If I need to post this bond how do I do this and how much will it cost and how long I have.t

  33. I will be applying for an auto dealers license an need a surety bond what is the normal cost do I have to have the 10, 000 that the bond is required to be?

  34. I have 30K coming from the VA. It is part of a veteran's pension. A surety was needed for this. Can I use the 30K once it is in my sister's hands as fiduciary to pay for my taxes due this year?

    1. Hey Glenn,

      We cannot advise on what particular items can or cannot be paid out of the VA account. You'll need to contact the VA for that information.

      Sorry I couldn't offer more help.

  35. We are young plant brokers in Florida. We do not come in contact with the plant material as these are shipped from assorted greenhouses. Are we required to have a surety bond? We are co-owners, one with excellent credit, and the other, due to a divorce poor credit. We've applied for a bond of $35,000.00 and been quoted $3,000.00 This seems really excessive & unreasonable. We've been told its due to the poor credit of the one co-owner.


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