How to Get a Surety Bond
Getting a surety bond is essential for businesses and professionals who need to meet certain obligations. While requirements vary depending on the bond type and state, knowing where to start can make the process easier. We can guide you through the process, helping you secure the right bond efficiently and cost-effectively.
Below is a clear, step-by-step guide to securing a surety bond through a licensed surety company.
How to Get a Surety Bond: Step-By-Step
Step 1. Determine the Type of Bond You Need
Start by contacting the entity requiring the bond (obligee), whether it’s a government agency, client, or organization, to confirm:
- The specific type of bond required
- The coverage amount or bond limit
- Any special requirements, forms, or deadlines
This step ensures you apply for the correct bond and prevents delays or non-compliance. Different obligees may have different rules, so getting precise instructions upfront is critical.
Step 2: Work With a Licensed Surety Company or Agent
Contact a licensed surety company or agent to help secure the bond. The company can:
- Confirm the correct bond type for the business or project
- Compare multiple surety options to find the most competitive premium
- Assist with completing the bond application accurately and efficiently
- File the bond with the obligee to ensure compliance
For high-value, complex, or specialty bonds, licensed surety companies may provide access to SBA-backed surety programs and specialized underwriting to simplify approval. Licensed professionals ensure your application meets state and industry regulations.
Step 3: Gather and Submit the Application
Collect all necessary information and documents to complete your bond application. Typical requirements include:
- Personal and business details (name, address, ownership structure)
- Evidence of your business experience in the relevant industry
- Financial statements or summaries
For larger or specialty bonds, you may also need:
- Tax returns or audited financial reports
- Professional licenses, certifications, or resumes demonstrating expertise
Submit your completed application to the licensed surety company to officially start the bond process.
Step 4: Complete the Underwriting Process
Once the application is submitted, the surety company’s underwriter reviews it to evaluate the risk of issuing the bond. They consider:
- The stability and history of your business
- Industry experience and qualifications
- Any potential issues that could lead to a claim
Providing thorough and accurate information during Step 3 can speed up underwriting, avoid delays, and help secure a more favorable premium.
Step 5: Review the Quote and Pay the Premium
Once underwriting is complete, the surety company will provide a premium quote. Premium is the cost of the bond and is typically 1–10% of the bond amount, depending on factors such as the bond type, risk level, and your business history.
Example: A $10,000 bond may cost between $100 and $1,000.
After reviewing the quote, pay the premium to finalize the bond. Most applicants can still secure a bond with lower credit, although premiums may be higher.
Step 6: Sign and File the Bond
Once the bond is issued:
- Sign the bond as the principal
- File it with the obligee according to their requirements, either electronically or physically
Keep a copy of the bond for records and to provide proof of compliance when necessary.
Who Is Eligible for a Surety Bond?
Eligibility for a surety bond often depends on your history with previous bonds. Being eligible is not automatic, especially if claims have been made against your past bonds.
How Past Bond Claims Affect Eligibility
A prior bond claim or suspension can impact your ability to secure a new bond. The effect typically depends on:
- How long ago the claim occurred – older claims may have less impact.
- The reason for the claim – serious violations are more likely to affect eligibility.
- The duration of the suspension – longer suspensions can create additional hurdles.
Some surety companies may still work with principals who have past claims, particularly if sufficient time has passed and business practices have improved.
Other Factors That Affect Eligibility
Additional considerations may include:
- Multiple bonds: If you need more than one bond for different services, eligibility requirements may vary.
- State regulations: Each state may have specific rules affecting the type of bond required and which surety companies are allowed to issue policies.
How to Get a Surety Bond Frequently Asked Questions (FAQ)
Failing to obtain a required surety bond can lead to fines, penalties, or being unable to operate legally. It may also prevent you from securing contracts or licenses. A bond ensures compliance and protects both your business and your clients.
It depends on the bond type. Instant issue bonds can be issued within hours, while bonds requiring full underwriting usually take a few days. Providing complete documentation can speed up the process.
Yes. Many surety companies consider overall financial stability, not just credit scores. Past claims or lower credit may increase premiums, but most applicants can still secure a bond.
No. Working with a licensed surety company makes the process straightforward. By providing accurate business and financial information and selecting the correct bond type, you can usually secure a bond efficiently.
Being bonded means a surety company guarantees you will meet your obligations to the obligee. If you fail, the surety may pay claims on your behalf, and you are responsible for reimbursing the surety. Being bonded demonstrates credibility and financial responsibility.
Most bonds last one year. To stay compliant, renew before the expiration date, provide updated information if required, and pay the renewal premium. Letting a bond lapse can result in fines or loss of licensing.