How Much Does a Surety Bond Cost?

Surety bond costs are typically 1-10% of the bond amount, but this varies by the bond type required of you and your financial strength.

Generally speaking, the cost of a surety bond is calculated as a small percentage of the total bond amount that is required to be in place. Contractor bonds specific to public jobs, though, are based on the full contract amount.

Your rate is the percentage of the full bond amount you need to pay, and a direct reflection of how risky you appear to the surety companies.

Rates will vary depending on your likelihood of causing claims by failing to follow through with what your bond guarantees. Keep in mind, if you cause bond claims the surety company will pay them at first.

However, when a surety company writes a bond they are vouching for you by saying if you trigger bond claims, you'll pay them back in full (which can be as large as the full bond amount).

Let’s say you need a $25,000 surety bond for your business, and the rate provided based on your credit history, business financial statements, and experience in the industry is $15 per thousand. This means the cost of your surety bond is $375, or 1.5% of the bond amount needed.

If you have less than ideal credit or minimal experience in your industry, your rate may be higher. For the same $25,000 bond with a rate of $50/M, the cost of your bond is $1,250. This is equal to 5% of the total bond amount.

The percentage of the total bond amount you pay is based on a handful of factors, including your credit score, the type of bond you need, your financial statements, verification of assets, and your experience in the industry. Let’s take a closer look at each.

Credit Score: Standard Market vs. Bad Credit

If you have good credit, meaning minimal or no negative marks on your credit report and a relatively high credit score, you are considered a standard risk to a surety agency. The price of your bond is calculated at a lower rate, so the percentage you pay is lower. With bad credit, the percentage of the total bond amount you pay will be higher because of this increased risk. See “Bad Credit Surety Bonds” for more information and FAQs.

Type of Bond

The type of bond you need will dictate how much you pay. 

Freight brokers, for instance, are required to have a bond of at least $75,000 in place. Other bonds required by the Federal Government may also have higher bond requirements.

The higher the bond amount, the higher the cost to you since bond costs are calculated on the bond amount.

Financial Statements

Depending on your industry, financial statements may also be evaluated when you apply for a bond.

If you have weak financial statements or are unable to provide them, you are assumed to be a higher risk and therefore, pay a higher percentage of the bond total.

Asset Verification

Verifying the assets you or the business own is helpful in determining the risk you present as a bondholder. If you have no assets, and a negative credit history, you are likely to pay more for your surety bond than those who can verify their assets.

Experience in the Industry

Those who have been working in the same industry for several years who have few or no bond claims are a much lower risk to surety agencies than those who are just getting started.

Several different types of surety bonds exist, and each requires a surety agency to look at your personal credit, financial statements and assets, and your experience in the business.

However, the type of bond you need also plays a role in the rate you pay for your bond. Here are several common types of bonds and some insight into how much they cost.

How Much Does a License Surety Bond Cost?

The cost of your license bond is based on the bond amount required by your city or state, the type of specific license you are seeking, and the other factors mentioned above.

Typically, this bond cost is between 1% to 10% of the total bond amount required for your license.

How Much Do Construction Bonds Cost?

The cost of a construction bond varies greatly depending on the specific type of bond you need. In most cases, however, the amount you pay is the same percentage range as other bonds, between 1% and 3% of the bond amount.

You can read our in-depth guide to determine what a performance bond costs. Also, we have put together information specific to bid bonds as well.

How Much Does a Fidelity Bond Cost?

The total cost you pay for fidelity bonds is based on the type of coverage you need, the amount of the bond, the number of employees you have, and certain controls you have in place for your business.

If you want to get a firm quote on your fidelity bond cost, you will need to fill out an application. You can also read our guide on how to get bonded and insured to get a better understanding of the costs associated with fidelity bonds and other surety bonds you may need.

How Much Does a Court Bond Cost?

All court bonds cost a percentage of the total bond amount, but the percentage you pay varies depending on the type of court bond you need.

• Probate bond costs are based mostly on personal credit, but pricing can also be impacted by other circumstances, like the complexity of the estate.
• Appeal bond costs are calculated using your business financial strength.
• Guardianship bond costs are dependent on personal credit score as well as the character of the applicant.

If you're looking for an estimated bond rate based on your credit score, the table below shows yearly premiums based on various credit rankings and bond amounts. Keep in mind this is just an estimate and does not take into account any taxes or extended bond terms.

For the most accurate bond quote, check out our instant online bond estimator.