Houston Surety Bond

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What is a Houston Surety Bond?

Houston surety bonds are a legal requirement for certain businesses and professionals operating in Houston, Texas. Furthermore, Houston courts may require surety bonds for court proceedings, known as court bonds. 

While there are many types of surety bonds available, they all involve three parties:

  • Principal: The person or business that needs to get bonded (you)
  • Obligee: The entity requiring the principal to get the bond (Ex. the State of Texas, city of Houston, or other governing body)
  • Surety: The party that supplies the bond and financially backs it (Ex. JW Surety Bonds)

A surety bond is a financial guarantee that the principal will follow specific rules and/or carry through with their contractual obligations. If they fail to do so, a claim can be made against the bond to compensate for damages. 

Example:  A used car dealer in Houston sells a car with no title. The vehicle is later reported stolen and seized from the purchaser's possession. The purchaser can then file a claim against the car dealer's Auto Dealer Bond for losses. The surety pays the purchaser for damages, and the used car dealer is then required to pay the surety back.

Requirements to Get Bonded in Houston

Surety bonds are required in Houston, Texas for a variety of reasons. And with over a hundred and fifty bonds available in Texas, it can be confusing to know what you need. However,  understanding the different types of surety bonds can make it easier. 

There are three broad bond categories: 

  1. License and permit bonds - these types of surety bonds are required for professionals and businesses to legally operate. They ensure business is conducted with integrity and that an individual or business fulfills all contractual obligations. Bonds that fall into this category include:
  2. 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 work is done ethically and to code. This bond category includes:
  3. Court bonds – Required by Houston courts and public officials for a variety of court proceedings. These include:

Find Your Surety Bond

Still not sure which surety bond you need? Here is how to ensure you get the right surety bond.

  1. Contact your obligee. They will be able to tell you which bond you need, along with the bond amount. This is generally the best way to guarantee that you get the right surety bond. 
  2. Use 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 surety bond quote started, such as your name, phone number, and email. 
  3. Contact our surety bond experts—we're always happy to help! Call us toll free at 1-888-592-6631 or get in touch using our contact page

Most Popular Surety Bond Types

Unless you work in the construction industry, license and permit bonds are Houston's most commonly required type of surety bond. There are many that we frequently underwrite, including auto dealer bonds and freight broker bonds. 

Getting an Auto Dealer Bond

Who needs a Houston auto dealer bond? Any motor vehicle dealer operating not just in Houston but anywhere in Texas needs an auto dealer bond. Note that additional bonds are required if you plan to operate outside the state. 

Obligee: Texas Department of Motor Vehicles

Bond Amount: $50,000

Getting a Freight Broker Bond

Who needs a Houston freight broker bond? Any freight broker operating in Texas needs a freight broker bond to ensure they adhere to all laws, statutes, and ethics surrounding the profession. Note that this freight broker bond covers the whole state of Texas—not just Houston.

Obligee: Federal Motor Carrier Safety Administration (FMCSA). 

Bond Amount: $75,000

Getting a Contractor License Bond

Plumbers, electricians, HVAC technicians, and other specialized tradespeople require a Texas contractor license to work in Houston. However, this licensing does not require a contractor license bond. You may need other bonds to conduct work though, such as bid bonds or paving bonds, so always double-check a city's bonding requirements before taking on a contract.

How Much Does a Houston Surety Bond Cost?

Surety bonds cost a small percentage of the total bond amount.

For example, if you have good credit a bond will generally cost 1% - 5%. This means that if you need a $10,000 bond, you will only pay a premium of $100 - $500. 

Get a free bond quote today.


How is a surety bond's cost determined? Risk assessment. Every bond goes through an underwriting process where an underwriter determines:

  1.  How much of a risk the applicant is to trigger a bond claim.
  2.  The applicant's ability to pay back a bond claim if it arises. 

This is generally done by looking at the applicant's credit score, but larger Texas surety bonds or certain types of bonds may also require financial statements, employment history, and other supplementary information. Note that you can often secure a better rate by getting your bond at a large surety company. They are able to offer lower premiums due to the high volume of bonds they underwrite.

Can You Get Bonded with Bad Credit?

Yes, you can get bonded with bad credit in many cases. These are commonly referred to as "bad credit surety bonds". 

License and permit bonds are the easiest types of bonds to secure with bad credit. While your bond premium will be higher, these bonds are obtainable with many types of credit issues. Court bonds are also accessible for most. In contrast, contractor bonds can be difficult to secure with credit issues. Large collections and civil judgment can unfortunately make them nearly impossible to obtain.

Bad credit or good credit, if you're curious about the rate you qualify for, you can get an instant estimate with our bond premium calculator.

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