San Diego Surety Bond

Bonding requirements in San Diego are dictated by federal laws, as well as local rules and regulations set out by governing bodies in the city and county (known as the obligee).

Simply put, a surety bond guarantees that contractual obligations are fulfilled by the bond holder (the principal). In the event that the principal defaults, the bond offers reimbursement for any financial losses or other damages incurred.

Thankfully, if you find yourself needing to get bonded, it is nothing to stress about—most San Diego bonds are quick and easy to obtain.

In San Diego there are hundreds of types of surety bonds, from commercial bonds to court bonds. These are needed to obtain licensing, legally undertake construction work, or proceed with certain court proceedings.

The easiest way to understand your bond needs is to contact whoever requires the bond from you (the obligee). They should be able to provide you with the bond form that you need. Remember that you only need a bond if one is being asked from you—with the exception of fidelity bonds.

San Diego fidelity bonds may be beneficial for both big and small business owners. This type of bond protects your clients from employee theft, embezzlement, and forgery. Since it is available through some insurance brokers and insurance services, it is sometimes incorrectly referred to as bond insurance. This category of bond includes ERISA bonds, janitorial bonds, and employee dishonesty bonds.

If you haven't been given any forms, understanding the three main categories of California surety bonds is an excellent place to begin your search. These broad categories are:

• License and permit bonds - these types of bonds are required for various professionals to obtain a license and operate legally in San Diego. Auto dealer bonds, mortgage broker bonds, Medicare bonds, sales tax bonds, and alcoholic beverage bonds are some examples.
• Contractor bonds – businesses, individuals and subcontractors working on public construction projects are likely required to obtain a contractor bond. These contract bonds may include bid bonds, performance bonds, and payment bonds.
• Court bonds – San Diego courts and public officials require these bonds for a variety of purposes. These include probate bonds, fiduciary bonds, or judicial bonds.

If you're unsure which bond type you need, you can use our find your bond tool or contact one of our surety bond experts.

Popular surety bonds in San Diego include auto dealer bonds, freight broker bonds, and contractor's license bonds.

Getting an Auto Dealer Bond

This license bond allows you to obtain a license to legally operate your dealership/sell vehicles. It is commonly referred to as an auto dealer bond or motor vehicle dealer bond. Some bond services put a cap on how many cars you can sell with their bond, so always read the fine print to ensure it meets your volume needs.

Getting a Freight Broker Bond

The Federal Motor Carrier Safety Administration (FMCSA) requires all freight brokers to get a freight broker bond.

See How to Become a Freight Broker for more information.

Getting a Contractor License Bond

A contractor license bond is needed to operate legally as a contractor in San Diego.

Other construction bonds commonly needed for public projects include bid bonds, payment bonds, performance bonds, permit bonds, paving bonds, supply bonds, and subdivision bonds.

Getting a Title Bond

A title bond is needed to register a vehicle when the original title is unavailable. You need a title bond if:

• You lost the original car title or it was stolen
• You paid for the vehicle and never got a title, and now that lender is out of business
• You have an antique or custom vehicle

A bonded title will become a regular title after approximately 3-5 years. This time is based on state laws, so places like San Diego, California may be different from another location like Fort Worth, Texas. Therefore, if you move before it transfers to a permanent title, it is always best to contact your surety bond company.

While surety bond amounts range from a few hundred to several million dollars, you only need to pay a small percentage of the total required bond amount. This is usually 1% - 10%, with a few bonds costing more (specifically for those with bad credit scores).

For example, with a $20,000 bond, the cost would generally be anywhere between $200 - $2,000.

The percentage you secure is based on an underwriting process. This means that once you fill out a bond application or opt for a free bond quote, underwriters will look at factors like your credit score, past bond history, character, and experience (for licensing bonds) to determine the cost.

You can use our bond premium calculator to get an instant estimate. Or if you need to get a firm surety bond quote, you can apply to get an online approval. All you need to get started is basic information such as your name, phone number, type of bond, and required bond amount.

Does It Matter Where I Get Bonded?

Yes, there is a noticeable gap between insurance companies and surety bond companies when it comes to rates and customer service. While insurance agents are experts in insurance, bonds are a completely different product. Since they don't have the same expertise, they unfortunately can't provide the same great customer service that bond specialists can when dealing with claims.

Need to get bonded quickly? Often a surety bond company has underwriters on staff as one of their core business services. This means they can usually get you a free quote quicker than an insurance agency or insurance company (who often contract out bond underwriting).

It's possible to get a bad credit surety bond in San Diego. However, it will depend on the bond type you need and how serious your credit issues are.

License and permit bonds are possible with bad credit. You may also get approved for court bonds with credit issues, but again, this will depend on how serious the issues are.

However, contract bonds are a bit more of a challenge with credit issues. While minor credit problems may still allow you to secure the bond, you'll probably be limited to smaller projects. Have severe credit issues like large collections or civil judgment? Unfortunately, it's almost impossible to get approved for contract bonds. The exception is if you're a larger contractor with strong CPA business financials.