What is a Fort Worth Surety Bond?
Fort Worth surety bonds are a legal requirement to conduct business in the State of Texas or the city of Fort Worth. They are needed for certain professionals (licensing bonds), contractor and construction jobs (contractor bonds), and court proceedings (court bonds).
A surety bond acts as a financial guarantee. It guarantees that the principal will be financially liable if they fail to fulfill contractual obligations and/or abide by certain laws and regulations.
Every type of surety bond involves three parties.
- Principal: The person or business that needs the bond.
- Obligee: The entity, often a governing body or licensing organization, requiring the principal to get bonded.
- Surety: The party that financially backs the bond and issues the bond to the principal.
Example: A hotel (principal) fails to pay sales tax to the state (obligee), which results in a claim against their Texas Sales Tax Bond. After investigation, the surety compensates the claimant. However, the principal must then pay back the surety for the full amount, plus any legal fees.
Requirements to Get Bonded in Fort Worth
While there are only a handful of bonds with the city of Fort Worth as the obligee, there are over 150 surety bond requirements across Texas. And depending on your line of work, operating needs, or court case, you may need one or more.
REMEMBER: You only need to get a surety bond if an obligee requires one from you. Sometimes an obligee will notify you of the need for a surety bond, but ultimately the responsibility falls on you. Failure to conduct business without a required bond can lead to repercussions like suspension of professional licensing and hefty fines. So always check the surety bond requirements in Texas, as well as the city and county you plan on operating in, to ensure you have the bonding you need.
Find Your Surety Bond
It can seem daunting to find the right surety bond with so many available, but there are many ways to ensure you get the bond you need.
- Contact your obligee. Your obligee should be able to tell you which surety bond you need, along with the bond amount. Often this information is available on an obligee’s website. However, if you can’t find it, don’t hesitate to contact them through email or phone.
- Check our database: Our Find Your Bond Tool is quick, free, and simple to use. Plus, after it helps you find the right bond, it can generate a free bond quote in seconds.
- Ask a surety company. Contact our bond experts - they would be happy to help you find the surety bond you need!
Most Popular Surety Bond Types
There are three broad bond categories, each with many popular bond types.
- License and permit bonds – needed to obtain professional licensing and conduct business. They financially guarantee that the principal will fulfill all contractual obligations and oblige by the federal laws, state laws, and ethics related to the profession. Popular license and permit bonds in Fort Worth, Texas include:
- Contractor bonds – commonly needed to work on public construction projects. They hold a contractor or contracting business financially accountable if they fail to pay suppliers or subcontractors, execute work up to code, deliver contractual obligations on time, or breach any other part of their bond contract. These bonds may include:
- Court bonds – bonds needed to participate in certain court proceedings in Fort Worth, Texas. They include:
Getting an Auto Dealer Bond
Also known as a motor vehicle dealer bond, this type of licensing bond is required for all auto dealers operating in Texas. It is a prerequisite to obtain an auto dealer license.
Obligee: Texas Department of Motor Vehicles
Bond Amount: $50,000
Getting a Freight Broker Bond
A freight broker bond is a prerequisite for a freight broker license. All freight brokers in Texas must be bonded.
Bond Amount: $75,000
Getting a Contractor License Bond
Contractor license bonds are among the most popular bond types in the U.S. However, neither Fort Worth nor Texas has contractor licensing requirements that outline the need for this bond.
How Much Does a Fort Worth Surety Bond Cost?
Bond costs vary depending on the bond you need and the bond premium you qualify for. However, whether you need a bond in the amount of $10,000 or $100,000, you will only need to pay a small percentage of the full bond amount to get bonded.
For example, an applicant that is considered low risk (good credit score, unlikely to trigger a bond claim, etc.) can expect to pay 1% - 5% on most bonds. Therefore, a $20,000 bond will cost approximately $200 – $1,000.
How do I get the best surety bond rate?
Having a good credit score, no past bond claims and good financials make you low risk, which in turn, makes you a prime candidate for a low bond premium. However, picking the right surety company can also be a big help. A large and established surety, like JW Surety Bonds, can help you secure a lower bond rate thanks to the high volume of bonds they underwrite