What is a Dallas Surety Bond?
Dallas surety bonds are required for certain professionals to legally operate in Dallas, Texas, and for various court proceedings. However, no matter the type of surety bond, it always consists of three parties:
- Principal: the person that needs to purchase the bond (you);
- Obligee: the entity requiring the principal to get bonded (ex. government organization, city of Dallas, etc.);
- Surety: the party that backs the bond financially (ex. JW Surety).
In short, a surety bond ensures that the principal is financially liable if they conduct illegal or unethical activity that results in losses.
For example, say a supplier in Texas has been contracted to provide supplies for a construction job in Dallas. However, they fail to do so within the agreed-upon time stated in his contract; claim can then be made against the supplier’s supply bond for any damages due to this incident. The surety pays for the damages initially, but the supplier is then on the hook to pay them back.
Requirements to Get Bonded in Dallas
You may need a surety bond in Dallas, Texas for many different reasons—over a hundred bonds are available. These bonds can be broken down into three broad categories.
- License and permit bonds - these types of surety bonds are required for professionals to operate in certain industries. They ensure the professional conducts business with integrity and fulfills all contractual obligations. Examples include auto dealer bonds, contractor license bonds, notary bonds, mortgage broker bonds, Medicare bonds, and alcoholic beverage bonds.
- Contractor bonds – businesses and individuals working on public construction projects are likely required to obtain a contractor bond. These construction bonds uphold the integrity of the construction industry by ensuring sub-contractors get paid, protecting project owners from faulty work, etc. This bond category includes permit bonds, payment bonds, performance bonds, contract bonds, supply bonds, and bid bonds.
- Court bonds – Dallas courts and public officials require these bonds for a variety of purposes. These include probate bonds, fiduciary bonds, or judicial bonds.
Find Your Surety Bond
There are three simple ways to find out which surety bond you need.
- The best way to find out which bond you are required to get is to contact the state of Texas. They will be able to tell you which bond you need, along with the bond amount.
- Try our find your bond tool. It is designed to be quick and easy. Plus, once the tool finds the bond you need, you can get a quick estimate in 30 seconds or a free quote in less than 5 minutes. We only need basic information to get your quote started, such as your name, phone number, and email.
- Contact one of our surety bond experts toll free at 1-888-592-6631. We’re always happy to help!
Most Popular Surety Bond Types
Getting an Auto Dealer Bond
Motor vehicle dealers operating in Dallas—and anywhere else in Texas—are required to post an auto dealer bond in the amount of $50,000.
This auto dealer bond is a licensing requirement set out by the Texas Department of Motor Vehicles.
Getting a Freight Broker Bond
All freight brokers in Dallas are required to get a freight broker bond in the amount of $75,000.
This bond ensures that the principal will conduct business in accordance with the laws, statutes, and regulations surrounding the profession. The bond is a requirement set forth by the Federal Motor Carrier Safety Administration (FMCSA).
Getting a Contractor Bond
The Texas Department of Licensing & Regulation (TDLR) regulates all contractor licenses in Texas, and they do not require a contractor license bond. However, every city and municipality has its own regulations and bonding requirements regarding contracting.
For example, Dallas requires a paving bond in the amount of $10,000, while other areas, such as Forth Worth and Carrollton, do not. Always check the requirements of the city you’re working in to see which types of contractor bonds are required for contracting in that area.
How Much Does a Dallas Surety Bond Cost?
A Dallas surety bond costs a small percentage of the total bond amount. This percentage is called a bond premium.
For example, a $50,000 auto dealer bond will cost an applicant with good credit anywhere from 1% to 5% of the total bond amount ($500 - $2,500). Those with bad credit can expect to pay a higher bond premium.
Want to secure the lowest bond premium possible? Consider going with a large surety company, like JW Surety. A larger bond company can offer more competitive rates than small sureties or insurance companies due to the volume of bonds they underwrite and in-house underwriting services.
Get your free bond quote.
Can You Get Bonded with Bad Credit?
Yes, it is possible to get bonded with bad credit in Dallas. You may see these referred to as bad credit surety bonds—although they are just regular surety bonds with a higher bond rate.
Whether or not you qualify for a bond with bad credit will depend on the extent of your credit issues and the type of bond you require. Many licensing bonds and court bonds are issuable to those with lower credit scores. However, contract bonds are a bit more challenging to secure—expect high costs if you have severe credit issues like large collections or civil judgment.
Want to know what your bond will cost? Use our free estimate tool.