Frequently Asked Questions

Definition FAQ's:

What is a surety bond?

It’s a guarantee that you will operate according to the rules and regulations in place. Surety bond guarantees vary depending on the type of bond you need, and there are hundreds of bonds required for many different occupations/uses. They are sometimes referred to as "security bonds", which is an incorrect term. Find out more about what surety bonds are and how they work.

What is an obligee?

It is the entity that requires a bond of you in order to operate legally.

What is a fidelity bond?

It is an insurance product that protects against employee dishonesty such as embezzlement and theft. There are different types of fidelity bonds that provide various forms of protection. Fidelity bonds are insurance and are generally optional to obtain, while surety bonds are required.

What is an indemnity agreement?

It's a legally binding contract that you must sign to get a surety bond. It guarantees that if you cause bond claims you will pay them in full. Read our guide to learn more about how indemnity agreements work.

Bonding Cost FAQ's:

How much does a surety bond cost?

Costs are a percentage of the full bond amount, which is usually based on your personal credit. You can use our tool to get a ball park estimate. You can also learn more about how your surety bond costs are calculated.

If you want the most thorough answers available to all of the fundamental questions related to getting a surety bond (such as "what do surety bonds cost?"), you can download our free "Consumer's Guide to Surety Bonds" e-book.

How do you get the best rate?

Providing industry experience, strong personal credit and business/personal financials will help lower your bond rate.

Do you pay you the full bond amount?

No. Generally, you will pay a percentage of the bond amount, which is based largely on your financial strength. However, some construction bonds (e.g. bid bonds and performance bonds) require you to pay a percentage of the full contract amount. You can apply online and get a firm quote.

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How is my bond premium calculated?

The bond size and your likelihood of causing bond claims are used to calculate premium. Bond companies determine your odds of causing claims by looking at your line of work, personal credit and industry experience. Keep in mind, you’re responsible to pay for bond claims in full (including legal costs). Find out additional reasons why you should avoid bond claims at all costs.

General FAQ's:

How do surety bonds work?

If you’re required to get a surety bond, it’s to guarantee that you will operate professionally (there are hundreds of different bonds used for many purposes). If you break the rules, a claim can be made on your bond which you’re responsible to pay. Learn more about how surety bonds work.

Why do you need a surety bond?

You are required to get a bond because it guarantees you will fulfill your obligations. It’s protection for the public, not you.

Can you get a surety bond with bad credit?

Yes, it is possible. There are high risk bond markets for license & permit bonds and you can usually get you approved with credit issues. Most people can also get approved for fidelity bonds regardless of credit.

We may be able to approve you for a court bond with bad credit, but this varies on the type and your financial situation. For contract bonds, larger contractors with poor credit can be approved with strong CPA prepared business financials. However, smaller contract accounts will not be able to obtain a bond as there are no high risk markets.

How do you know if you need a bond?

With surety bonds, the obligee (the entity requiring the bond) will determine whether a bond is required. Bond requirements vary greatly by your occupation and location.

Fidelity bonds are insurance and are usually optional to obtain. However, they are sometimes required along with a surety bond to operate legally. You can use our tool to get a free bond analysis and determine which bond is right for you.

I'm an insurance broker. Will you work with me?

Yes! You can sign up as a broker on our website and begin submitting applications now.

How to Get a Surety Bond FAQ's:

How do you get a surety bond?

You will need to apply with a surety bond provider that is licensed in your state. It is helpful to provide the exact bond type and amount that you need to obtain. If you already know which bond you need, simply apply online and get instantly approved. If you’re unsure of which type of bond you need, you can take a look at the surety bonds required by state. If you need additional help, please contact a bond professional.

How long does it take to obtain a surety bond?

You can get instantly approved and print license & permit bonds and contract bonds at your home or office. However, we do not offer instant approvals for court bonds, as the underwriting process generally involves a more extensive review of the applicant.

Why do you need spouse information?

Your marriage legally joined your assets with your spouse. Your spouse is required to sign the indemnity agreement on your behalf, just as you are, to confirm they agree to pledge your shared assets and reimburse the surety for any potential claims. Bonding companies also use spousal indemnification to get an indication of your character. If your spouse will not guarantee you, the bonding company also will not.

What is a blank surety bond form and where do you get one?

It is a blank copy of the bond required by the obligee, and it states exactly what the bond guarantees. We have most of the industry standard forms on file. If we do not have your bond form, you will need to obtain it from the obligee.

Claim FAQ's:

What if you have a false bond claim?

If you have a bond with our company, please contact us immediately so we can assist you with the claim process. If you have a bond with a different agency, you’ll have to contact the claims department of the bond company who wrote your bond. Keep in mind, it is crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.

How can you avoid bond claims?

You must follow the terms of the bond and fulfill all of your obligations (this varies greatly depending on the bond type). Keep in mind, deciding where to get a surety bond is important when it comes understanding claims and avoiding them entirely. If you have any questions about what your bond does or doesn’t guarantee, please contact a bond professional.

What good is a bond if you have to pay for claims?

A bond is a form of credit to you, not insurance. When a surety extends credit to you with a bond, they are vouching that you will abide by the terms of the bond. If you don't comply with all bond terms, you are responsible for any claims triggered as a result.