Within higher risk industries such as construction or finance, surety bonds can reach in excess of one million dollars, acting as a financial guarantee that any principal will fulfill its obligations and comply with state or federal regulations. However, even with this significant surety bond amount, businesses required to post this type of bond will not have to pay the full 1 million dollars.

Today, working with a surety company, businesses may pay a fraction that figure as part of their bond premium. This means, the cost of a $1 million surety bond to businesses is significantly less, while still providing the level of indemnity required by law. It also means that business owners can retain capital that may otherwise be tied up.

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However, the annual surety bond premium paid by any given business or individual will depend on a number of factors. These usually include credit history and business performance, with those with poor credit scores generally paying more than those who have good credit scores.

The bond cost will also depend on exactly which type of bond you require and the surety company you use. For example, a commercial bond (for example, a license bond), business owners can expect premiums of between 1 and 5%—although this bond amount is rare, and you are more likely to find $1 million bond requirements within construction and finance.

Here then, we explore in more depth exactly what types of business require a million dollar surety bond and what this type of surety bond costs. Read on to learn more.

Most Common $1 Million Surety Bonds

You can find a list of the most common $1 million surety bonds below, however, if you require more information on any type of bond or the bonding process, contact us today.

Performance & Payment Bonds

Performance bonds and payment bonds guarantee that a business performs to the terms of its contract­. For this reason, they are often classified as contractor bonds. Within the construction industry, for example, the amount of the bond can vary significantly, and million-dollar bonds require a more detailed underwriting process than a $5000 bond.

Depending on the size of the project or company, a million-dollar bond may be necessary in order to obtain a contractor license so that your business can legally practice within the industry.

Fidelity Bonds

While not technically surety bonds, fidelity bonds are often taken out by businesses who wish to protect their clients from the potentially harmful actions of employees. This means that, depending on the assets, information, and intellectual property that employees have access to, fidelity bonds can reach upwards of 1 million dollars.

Money Transmitter Bonds

Any business that regularly transacts large amounts of consumer money is likely to require a bond. Money transmitters, in particular, may be required to post large, million-dollar bonds in order to ensure security for the consumer and to reimburse any money lost. States currently requiring a $1 million dollar money transmitter bond include Colorado, North Carolina, New York, Texas, and Virginia.

Court Bonds

Fiduciary bonds and appeal bonds are the most common form of court bond, however, other types do exist. The bond price is usually tied to the type of bond issued with, for example, appeal bonds calculated on the financial strength of your business, and other bonds such as probate and guardianship bonds dependent on personal credit score and other factors.

How to Get a $1 Million Surety Bond with Bad Credit

Whatever your situation, it is usually possible to obtain a $1 million bond—even if you or your business has bad credit. However, the bond application is likely to be more comprehensive and the bond rate more costly. Within the industry, a credit score of less than 650 is usually considered high risk, so it is important to speak to an experienced surety company in these cases.

High value bonds, as is this case with million-dollar bonds and above, are considered a greater risk for the bonding company, and you may expect to pay higher bond prices in order to ensure coverage. This may range between an annual premium of between 5% and 15%.