Which Surety Bond in Texas Do You Need?
There are three types of surety bonds in Texas that can be required of you:
- License bonds needed for many professions such as contractors and auto dealers to operate legally.
- Court bonds required by Texas courts for various purposes.
- Contractor bonds for public construction projects.
The obligee (the one requiring the bond of you) should be able to provide a copy of the Texas surety bond form you need. It’s important that you understand how surety bonds work and that you're responsible to pay claims. You can also take a look at our guide to learn how to get bonded in Texas.
Find Your Surety Bond
Getting License and Permit Bonds
Texas requires license and permit bonds in order to get licenses/permits for many different professions. You can find the full list of license and permit bond requirements for Texas by using our bond requirement search tool.
One of the most commonly needed license bonds is the Texas motor vehicle dealer bond needed to sell vehicles and get a dealer license, which is required by the Texas Department of Motor Vehicles (TXDMV). Another commonly needed bond is the certificate of title bond needed to transfer the ownership of a vehicle that has a lost/inaccurate title, which is also required by the TXDMV. Lastly, another frequently needed bond is the contractor license bond required to perform contracting work in several cities across Texas. Keep in mind, there are no contractor license bonds required by the state itself, only cities and towns. It’s possible that you may need both a contractor license bond and contract bonds depending on the type of work and where you’re performing it.
Getting Court Bonds in Texas
Court bonds can be required by the courts for various reasons. For example, you’ll need an appeal bond in Texas if you want to appeal a court decision. If you want to become a legal guardian of a minor/disabled individual, you’ll need a guardianship bond. Lastly, you will need a probate bond if you want to operate as a fiduciary of an estate.
Getting Contract Bonds for Public Jobs
Construction bonds such as bid bonds and performance bonds are needed to bid bonds and work on public construction jobs. However, they’re typically required by cities or municipalities as opposed to the state. Learn more about the process of getting bonded for jobs by reading our construction bond guide.
Texas Surety Bond Costs
"How much will my surety bond cost?" is one of the most common questions. Surety bonds generally cost 1-15% of the required bond amount. Pricing varies drastically depending on the bond amount required of you and your rate (which is the percentage of the full bond amount you must pay and will depend on your financial strength, e.g. personal credit). Bond costs are generally 1-10% of the full bond amount that's required of you in Texas. For example, if you need a $10,000 bond, your costs could be anywhere between $100 - $1,000. Bond pricing varies drastically depending on the bond amount required of you and your rate (which is the percentage of the full bond amount you must pay). 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. Keep in mind, pricing isn’t the only thing you should think about when buying a surety bond. Purchasing your bond from the wrong Texas bonding company can lead to it getting rejected with no refund. Find out how to choose the right bond company for you.
Can You Get Bonded with Bad Credit?
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 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; however, 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). Surety companies will view your personal credit issues as a direct reflection of how you will handle the responsibilities that come along with working on a public job, and your ability to pay bond claims if they happen. Find out how our company can save you money on bond claims if they happen.