Detroit Surety Bonds

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A Detroit surety bond refers to any bond required to get licensed, work, or partake in court proceedings in Detroit, Michigan. While some bonds are state-wide requirements, others are specifically set by the City of Detroit.

Each surety bond involves three parties:

Principal - the party that needs to get the surety bond (car dealer, construction company, etc.)

Obligee - the one that requires the principal to get bonded (City of Detroit, State of Michigan, etc.)

Surety - the surety company that issues and financially backs the bond. 

The main purpose of a Detroit surety bond—or any surety bond—is to protect government agencies and the general public from damages and losses caused by a principal’s fraud or misconduct. It is a financial guarantee that the principal will uphold their contractual obligations. Hence, surety bonds are often required for professions, construction projects, and court proceedings that are prone to unlawful or unethical activity.

Example of How a Detroit Surety Bond Works

A Detroit construction company (principal) is working on a new housing development. They hire two electrical contractors to do the wiring but fail to pay them because project funds run out. Luckily for the electricians, the construction company was required to get a payment bond. The electricians make a claim against the payment bond and get paid what they are owed by the surety company that issued the bond. The construction company must then pay back the surety in full, including any legal fees.

Surety Bond Requirements in Detroit

There are over 100 surety bond requirements in Michigan. While some of these bond requirements apply to other MI cities and counties (Lansing, Grand Rapids, Wayne County, etc.), many are for those who plan to work in Detroit or participate in Detroit court proceedings. Top Detroit and Michigan surety bonds include: 

A bond that is needed to get a Michigan auto dealer license. All new and used car dealers working in MI, including Detroit, must get licensed. 

Obligee: Michigan Department of State

Guide: How to Get a Michigan Auto Dealer License

All MI contractors must hold a Michigan contractor’s license, for which this surety bond is a requirement. 

Obligee: Varies

Guide: How to Get a Michigan Contractor License

Find Your Surety Bond

Surety bonds are a liability and not something you need unless an obligee requires one from you. Your obligee should also be able to supply you with all the information you need regarding the bond, such as the name of the bond and the amount. 

However, in the event that you are unsure of this information or missing something, JW Surety would be happy to assist. You can use our quick and easy Find Your Bond Tool or contact our bond experts.

Most Popular Surety Bond Types

There are thousands of surety bonds in the US—with 100+ Michigan surety bonds alone—so it can be easy to get overwhelmed. However, remembering that a surety bond generally fits into one of three broad categories can add ease.

License & Permit Bonds

Required to get a license or permit pertaining to a profession. This type of bond includes freight broker bonds, auto dealer bonds, contractor license bonds, and notary bonds.

Contractor Bonds

Contractor bonds are used in the construction industry to ensure quality of work, payment for workers, and more. Examples include bid bonds, performance and payment bonds, and construction bonds.

Court Bonds

A bond required to participate in certain court proceedings, such as getting guardianship over a minor. Court surety bonds include fiduciary bonds, probate bonds, guardianship bonds, and appeal bonds. Note that Detroit bail bonds are NOT a type of surety bond. They work differently and are unavailable through a surety bond or insurance company. If you require a bail bond, see a bail bondsman.

How Much Does a Detroit Surety Bond Cost?

A Detroit surety bond costs 1% - 5% of the total bond amount for those with good credit. 

Example: An applicant with good credit needs a $10,000 surety bond. Their rate to get the bond would be approximately $100 - $500. 

The initial part of the surety bond process—where an applicant’s bond cost is determined—is based on many factors. This underwriting process considers past bonding history, business history, and credit score. 

Get a free bond quote today to get your rate. Our quick online application provides instant approvals on many Detroit surety bonds.

Can You Get Bonded with Bad Credit?

Yes, many surety bonds are available to those with bad credit.

While these are often referred to as “bad credit surety bonds,” they work the same as any other surety bond. The only difference is the rate for these bonds is a little higher (often 5% - 10%) since applicants with bad credit are deemed higher risk. However, note that some types of bonds, such as construction bonds, may be unattainable if you have severe credit issues. In this case, you would need to go through a specialized surety bond service, such as the SBA program

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