“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.

How Do Surety Bonds Work?

Surety bonds are required to protect the public. They guarantee obligations will be fulfilled, whether it’s a construction 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.

Your Surety Bond is a Form of Credit

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. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.

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. Keep in mind, it's crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.

Still Have Questions?

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 take a look at the most frequent surety bond related questions here.

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ricky chambers
February 23, 2009

In reply to by admin


November 28, 2010

In reply to by admin

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?

September 20, 2011

In reply to by admin

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?

September 12, 2011

In reply to by admin

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.

September 8, 2011

In reply to by admin

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

November 7, 2011

In reply to by admin


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

August 27, 2012

In reply to by admin

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.

December 21, 2013

In reply to by admin

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?

July 31, 2016

In reply to by admin

I am the executor of my sister's estate which is very little, but I want to know, am I reimbursed of the money I pay for a surety bond in the end if everything goes as it should?

February 24, 2009

In reply to by ricky chambers

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".

Michael Weisbrot
November 1, 2009

In reply to by admin

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.

November 1, 2009

In reply to by admin

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?

October 19, 2010

In reply to by admin

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?

Michael Weisbrot
October 20, 2010

In reply to by tom

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: https://www.jwsuretybonds.com/edu/what-is-a-surety-bond

Michael Weisbrot
November 29, 2010

In reply to by nanci

Nanci, that would be a bail bond. The only type of surety bond we don't handle.

September 19, 2010

In reply to by admin

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?

Michael Weisbrot
September 20, 2010

In reply to by MGeake

I have never heard of a required bond for translators, as it would be near impossible to guarantee.

September 20, 2010

In reply to by admin

Thank you for your quick response!

Michael Weisbrot
September 20, 2011

In reply to by 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.

September 7, 2011

In reply to by admin

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?

Michael Weisbrot
September 7, 2011

In reply to by 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!

August 22, 2011

In reply to by admin

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.

Jw Surety Bonds
August 24, 2011

In reply to by 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.

October 21, 2011

In reply to by admin

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?

Michael Weisbrot
September 8, 2011

In reply to by MARYANN


You are in need of a "lost title bond". We don't write them, but many do! Just try a google search and you should be able to apply with an agecy offering them.

May 21, 2012

In reply to by admin

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

Ray H. Parker
December 5, 2012

In reply to by admin

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.

Michael Weisbrot
November 8, 2011

In reply to by 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.

May 25, 2012

In reply to by admin

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?

October 24, 2011

In reply to by admin

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.

Michael Weisbrot
October 25, 2011

In reply to by 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.

Eric Weisbrot
May 25, 2012

In reply to by admin


This sounds like a lost instrument bond and we don't handle them.

Contact a local insurance agency.

November 10, 2011

In reply to by admin

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!

Michael Weisbrot
November 11, 2011

In reply to by Vicki

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.

January 18, 2012

In reply to by admin

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

Michael Weisbrot
January 19, 2012

In reply to by Leslie

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.

Eric Weisbrot
May 22, 2012

In reply to by admin


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.

Eric Weisbrot
December 6, 2012

In reply to by admin


This is a question that you'll want to ask an attorney. This isn't something we are familiar with and can answer accurately.

October 5, 2012

In reply to by admin

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

October 10, 2012

In reply to by admin

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

Eric Weisbrot
October 11, 2012

In reply to by Gregory


We only handle surety bonds, so I can't help you with insurance.

Is anyone requiring a bond of you?

October 28, 2012

In reply to by admin

I am starting a small residential cleaning company, what type of bond do i need for the state of michigan, and why?

February 11, 2013

In reply to by admin


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?


Eric Weisbrot
February 11, 2013

In reply to by realitycheck832

Hi there,

Unfortunately I can't offer any accurate information, as we don't handle this type of bond.

Mikel Nurad
October 11, 2012

In reply to by admin

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?

Eric Weisbrot
October 12, 2012

In reply to by Mikel Nurad


I can't help you out with this, as we don't handle vehicle title bonds.

Try contacting a local insurance agency.

Eric Weisbrot
November 2, 2012

In reply to by admin


I'll need some more information in order to help.

Is the state requiring a bond of you?

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