Texas Surety Bonds

A Texas surety bond is a legally binding, three-party agreement that guarantees a business or individual will comply with applicable Texas laws, administrative rules, and contractual obligations. These bonds are required as a condition of licensing, permitting, court proceedings, or participation in certain public and private projects.

Rather than functioning as insurance for the bondholder, a Texas surety bond acts as a financial guarantee to the party requiring the bond. If the bonded party fails to follow the law or meet their obligations, the bond provides a mechanism for financial recovery to harmed parties.

Every Texas surety bond involves the following parties:

• Principal – The individual or business required to obtain the bond. The principal is responsible for complying with all applicable laws and regulations and is financially liable for any valid claims paid by the surety.
   
• Obligee – The government agency, court, municipality, or project owner that requires the bond. The obligee sets the bond amount, bond conditions, and form requirements.
   
• Surety – A licensed surety company that underwrites and issues the bond. The surety guarantees the principal’s obligations and investigates any claims made against the bond.

What is the Purpose of a Surety Bond?

A surety bond acts as a form of credit to you. It will pay your customers if you fail to complete the agreed-upon work. Or, in the case of some commercial bonds like a sales tax bond, it pays the government if you default on contractual obligations, such as remitting sales tax. The exception is a fidelity bond, which protects you or your clients from dishonest employees who may commit theft, embezzlement, forgery, etc.

It's important to understand how surety bonds work and that you're responsible for paying claims. You can take a look at our guide to learn how to get bonded in Texas to learn more.

The obligee (the one requiring you to get the bond) should be able to provide a copy of the Texas surety bond form you need. However, if you are still early in the application process and haven't been given any forms, understanding the three main categories of surety bonds is a good place to begin your search.

• License and permit bonds - these types of bonds are required for various professionals to operate legally. Auto dealer bonds, mortgage broker bonds, and athlete agent bonds are some examples. Notary bonds for notary publics also fall into this category.
• Contractor bonds – businesses and individuals 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 – Texas courts require these bonds for a variety of purposes. These include probate 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.

Most Common Surety Bonds in Texas
 

• Texas Motor Vehicle Dealer Bond ($50,000) - Required to sell vehicles and obtain a dealer license. Mandated by the Texas Department of Motor Vehicles (TXDMV).
   
• Texas Certificate of Title Bond (1.5× the Vehicle Value) - Needed to transfer ownership of a vehicle with a lost, missing, or inaccurate title. The bond amount is typically one and a half times the appraised vehicle value.
   
• Texas Mortgage Broker Bond ($50,000 – $100,000) – Required for mortgage brokers licensed in Texas to ensure compliance with the Texas Finance Code and state lending regulations. This bond protects consumers and the state in case the broker violates licensing laws or mismanages client funds.
   
• Texas Contractor License Bond ($5,000 – $25,000) (City-Dependent) - Required for contractors working in certain Texas cities and municipalities. Texas does not require a statewide contractor license bond—bond requirements vary by city. Depending on your work and location, you may also need contract bonds for public construction projects.
   
• Freight Broker Bond (BMC-84) ($75,000) - Required by the Federal Motor Carrier Safety Administration (FMCSA) for brokers operating in or from Texas.
   
• Texas Public Insurance Adjuster Bond ($10,000) - Required by the Texas Department of Insurance for all licensed public insurance adjusters.
   
• Texas Title Insurance Agent Bond ($10,000) - Required under the Texas Title Insurance Act. All title insurance agents must post this bond before conducting business.
   
• Texas Third Party Debt Collector Bond ($10,000) - Required for all third-party debt collectors operating legally in Texas.
   
• Texas Credit Services Organization Bond ($10,000 – $100,000) - Required by the Texas Secretary of State to ensure the principal complies with Chapter 393 of the Finance Code. The bond amount depends on the number of business locations.
   
• Texas Mixed Beverage Sales Tax Bond (Set by the Comptroller) - Required for businesses selling mixed alcoholic beverages. Often paired with the Mixed Beverage Gross Receipts Tax Bond.
   
• Texas Notary Bond ($10,000) - Required as part of the commissioning process for notaries public in Texas.

Obtaining a Texas surety bond is a structured, step-by-step process that can be completed quickly if you have the required information and documentation. The process varies slightly depending on the type of bond—license, contractor, or court—but follows the same essential steps:

1. Identify the Bond You Need

• Determine the exact bond type required for your business, license, or court proceeding.
   
• Contact the obligee (state agency, city, or court) if you’re unsure — they will provide the required bond form and bond amount.
   
• Common bond types include:
   
  • License and permit bonds (auto dealer, notary, credit services, insurance adjuster)
     
  • Contractor bonds (performance, payment, or license bonds for city-level requirements)
     
  • Court bonds (appeal bonds, probate bonds, guardianship bonds)
     

2. Complete a Bond Application

• Fill out a bond application with a licensed Texas surety company.
   
• Provide details about your personal information, business, bond type, and bond amount.
   
• Be honest and accurate — underwriting depends on this information.
   

3. Underwriting and Risk Assessment

• The surety company will assess your financial and credit profile to determine your risk.
   
• They may request:
   
  • Credit reports
     
  • Business or personal financial statements
     
  • Tax returns (for larger bonds)
     
• Most license and permit bonds are approved quickly, even for applicants with minor credit issues.
   
• Contract bonds or court bonds may take longer due to higher risk evaluation.
   

4. Receive a Quote and Sign an Indemnity Agreement

• The surety will provide a bond quote, which is the premium you pay to secure the bond.
   
• You will sign an indemnity agreement, agreeing to reimburse the surety if a claim is filed and paid.
   

5. Pay the Bond Premium

• Bond premiums are typically 1–10% of the total bond amount, depending on your risk and the type of bond.
   
• Payment can usually be completed online, by credit card, or by check.
   

6. Obtain the Bond Form

• Once approved and paid, the surety will issue the official bond form.
   
• The bond is sent to:
   
  • You (the principal)
  • The obligee (state agency, city, or court)

Surety companies may need financial statements and a credit report when assessing your eligibility for a bond. They want to know that you can pay bond claims if they happen and that you can handle the responsibilities tied to a bond.

How Long Does It Take to Get a Surety Bond in Texas?

When you go with an experienced surety company, bonding is a quick and painless process that can be done in as little as a day or two. Larger bonds and performance and payment bonds often require a little extra processing time.

How Long Does a Surety Bond Last?

When it comes to surety bonds there are renewable bonds and continuous bonds. Renewable bonds are valid anywhere from 1-4 years before they need to get manually renewed. Continuous bonds are automatically renewed every year until canceled. Any expiry dates will be laid out in your bond's paperwork.

Every Texas surety bond has a required bond amount set by the state, city, court, or agency. This amount represents the maximum financial protection available if a claim is filed. It is not the amount you pay.

Your actual cost, called the bond premium, is determined by 2 main factors:

1. The bond amount required
2. Your level of financial risk
    

Surety bonds are priced as a percentage of the bond amount, with that percentage determined through underwriting.

Most Texas surety bonds cost 1%–15% of the required bond amount.

The bond amount sets the base obligation, while your risk profile determines what percentage you pay.

For example:

• A $10,000 bond with a low-risk applicant may cost $100–$300
• The same $10,000 bond may cost more if the applicant presents higher risk
• A $50,000 bond will always cost more than a $10,000 bond, even at the same risk level

You can use our bond premium calculator to get an instant estimate. If you need to get a firm surety bond quote, you can apply to get an online approval.

It's possible to get surety bonds with bad credit in Texas, but it will depend on the bond type you need and how serious your credit issues are.

You can get approved for most license and permit bonds even with bad credit. It's also possible to get approved for court bonds with credit issues, but again, this will depend on how serious the issues are.

However, it's harder to get contract bonds with credit issues. You may be able to get contract bonds with minor credit problems, but you'll probably be limited to smaller projects. Unfortunately, it's almost impossible to get approved for contract bonds with severe credit issues such as large collections or civil judgments (unless you're a larger contractor with strong CPA business financials).

Texas surety bonds are required by a wide range of regulatory bodies, including:

• Texas Secretary of State – Credit services organizations, debt collectors, and other regulated businesses
   
• Texas Department of Licensing and Regulation (TDLR) – Various licensed occupations and trades
   
• Texas Department of Motor Vehicles (TXDMV) – Motor vehicle dealers and related professionals
   
• Texas Comptroller of Public Accounts – Tax-related bonds such as sales tax and mixed beverage bonds
   
• Texas Department of Insurance – Insurance adjusters and title insurance agents
   
• Local Cities and Municipalities – Contractor and permit bonds required by cities such as Houston, Dallas, Austin, San Antonio, and many others
   

Because requirements differ by authority, it’s important to obtain the exact bond form and amount specified by the obligee to avoid delays or rejection.

Choose your city from the list below if you wish to learn more about its bonding requirements. For an overview of all bonds in the state, keep reading.

San AntonioFort WorthHoustonDallas

When getting a Texas surety bond, choosing the right provider makes the process faster, easier, and more reliable. JW Surety Bonds stands out for:

• Licensed and Trusted – Fully authorized to issue all Texas bonds, backed by financially strong sureties.
   
• Fast, Expert Service – Same-day quotes and bond issuance for most license and permit bonds.
   
• Customer Support You Can Count On – Guidance through applications, renewals, and claims.
   
• Competitive Pricing – Transparent premiums based on your bond amount and risk, with options for applicants with credit challenges.
   

With JW Surety Bonds, you get the right bond quickly, accurately, and confidently.