Frequently Asked Questions

A surety bond is a three-party agreement involving a principal, obligee and surety that guarantees a specified obligation.

Pricing depends on bond type, amount, underwriting, and sometimes credit and financial history.

Requirements vary by state, city, industry and licensing authority. Check with the agency requiring the bond.

Many bonds may be applied for online, depending on product and state availability.

Surety bonds differ from traditional insurance: the principal is generally responsible for reimbursing the surety for valid claims.

The type of bond you need depends on your profession, business activity, contract, or licensing requirements. The agency, court, or organization requesting the bond can usually provide the required type, amount, and form.

Some bonds may be approved and issued quickly, while others require additional underwriting or documentation. Processing time depends on bond type, state requirements, and applicant qualifications.

Applications commonly request your name or business information, bond type, amount, state, and organization requiring the bond. Some also require credit information, financial statements, or supporting documents.

Possibly. Some programs accommodate applicants with lower credit scores, although premiums may be higher and approval is not guaranteed. Requirements vary by bond type and surety company.

Some applications involve a credit review. Whether the inquiry is soft or hard depends on the surety and application process. Review the applicable disclosures before applying.

Certain bond types may be available without a personal credit check. Others require underwriting and credit review. Availability depends on the bond and issuing surety.

No. The bond amount is the maximum stated obligation under the bond. The premium is what you pay to obtain it. For example, a $10,000 bond does not necessarily cost $10,000.

Some bonds require annual premiums, while others have multi-year terms or continue until canceled. Renewal and payment requirements depend on the bond form and issuing surety.

Cancellation and refund eligibility depend on the bond terms, surety company, and obligee requirements. Some bonds cannot be canceled without a formal release, and premiums may be nonrefundable.

Depending on the bond and filing requirements, documents may be delivered electronically or as physical originals. Some agencies require an original signed bond or specific filing procedures.

Many license and permit bonds must be filed with the requiring agency. Other bonds go to a court, project owner, or business. Follow the instructions provided by the obligee.

After approval, you will receive instructions for completing any required payment, signatures, and documentation. Once issued, the bond must be delivered or filed as required by the obligee.

Contact the bond provider as soon as possible. A correction, replacement bond, or new application may be required. Additional charges or restrictions may apply.

Terms vary. Some bonds have a fixed expiration date; others remain continuous until canceled or formally released. Check the bond document and obligee requirements.

Renewal may involve paying a new premium, obtaining a continuation certificate, or purchasing a replacement bond. The process depends on the surety and obligee.

Certain changes can be handled through a bond rider or endorsement; others require a new bond. Contact your bond provider to ensure the obligee will accept the change.

The surety generally reviews the claim and determines whether it is valid under the bond terms. If the surety pays a covered claim, the principal may be required to reimburse the surety under the indemnity agreement.

A surety bond generally protects the obligee and, for certain bonds, eligible third parties against specified failures by the bonded principal. It is not the same as liability insurance for the principal.

A license authorizes certain activities, insurance covers specified risks, and a surety bond guarantees a particular obligation. Depending on your profession, you may need all three.

An indemnity agreement generally requires the bonded principal or other indemnitors to reimburse the surety for covered losses, payments, and certain expenses arising from a bond claim.