Surety Bond FAQ – Everything You Need To Know

Explore our easy to use surety bond FAQ on this page. Use these FAQs to learn more about the many types of surety bonds available and how bonds work. Get fast answers to your surety and fidelity bond questions. We’ve compiled the questions we most commonly get asked here for you.

Why Get Your Surety Bond from Us?

The short answer: personalized service. As an in-house underwriter, we call on established relationships with many insurance companies to assemble custom policies tailored to your business needs. Some bond providers only work with a handful of insurance companies, so you’re stuck with less selection and bad rates.

Want another reason to choose us? Security. Our family-owned business invests in advanced technology that protects your company information. Enjoy the confidence of knowing you are backed with our multi-tier encryption when you use our site.

What Pricing Features Set Us Apart?

Get fast, professional service without the hidden fees other companies sneak in your bill:

  • No application fees
  • No credit report fees
  • No mandatory overnight fees

Don’t let dishonest bond companies nickel and dime you. Our honest, upfront pricing includes many services other companies make you pay for.

Who is the obligee?
The obligee in a surety transaction is the party/entity of the bond to which the principal guarantees they will perform their obligation.
Categorized: General Bond Information
Who are the three parties on the surety bond?
The Principal :  This is usually the business and its owners.  The person responsible for providing the bond. The Obligee:  This is who receives the surety bond or who is requesting the principal to obtain a surety bond.  Most of the time, the obligee is a government or state agency. The Surety:  This is the insurance company that is guaranteeing the principle will perform according to the bond form.
Categorized: General Bond Information
What type of surety bond do I need?
Surety bonds come in many different forms.  There are three main classifications:  Commercial, Contract, and Court.  Bond amounts can range from as low as $1,000 and go as high as several million dollars depending on the type of bond and the obligee requirements.  In some cases, you can ask the obligee for a blank bond form to make sure you are getting the correct type of bond.
Categorized: General Bond Information
What is the turnaround time to get a bond?
Some bonds can be issued over the phone in a matter of minutes while others may take several days to complete due to more stringent underwriting criteria.
Categorized: General Bond Information
What happens if there is a claim filed on my bond?
If there is a claim filed on your bond, you will be notified by the insurance company.  You must respond to the insurance company in writing immediately to try and resolve the claim.  If the claim is deemed to be valid, you must provide payment at once.  If the claim is deemed invalid, you will be notified once the claim has been closed.  If the surety has to pay out a claim on your bond, you will be expected to pay that claim back.
Categorized: General Bond Information
What are surety bonds?
Surety bonds are a contract between a minimum of three parties
  • The obligee: this is the party that is the recipient of the obligation
  • The principal: this is the party who has the responsibility of performing under the contractual obligation of the actual bond form.
  • The surety: the surety is the entity that insures the principal will perform the task required by the obligee.
Surety bonds are designed to protect an entity from monetary loss for failure to perform specific acts as defined by the bond form.
Categorized: General Bond Information
If I close my business before my bond expires can I obtain a refund on the bond?
Unfortunately, No.  Surety bonds are fully earned and no refunds are offered.
Categorized: General Bond Information
How much does a bond cost?
Most bonds will cost between 1%-4% a year of the bond amount for those with good credit.  For instance, if you need to purchase a $25,000 surety bond for a used car dealer in Florida and have good credit, you can expect to pay between $250-$1000.  If you have damaged or poor credit, you can expect to pay between 5% and 15% of the bond amount. Most premiums are yearly, however, there are some bonds that are required to be a mandatory 2 years by the obligee. If you have damaged or poor credit click here to learn how you can still purchase a bond with Single Source Insurance.
Categorized: General Bond Information
How much do surety bonds cost?
The cost of the bond or “premium” will vary greatly depending on several components. Since bonds are based on bond type, surety and the various obligees, their cost is dependent on the bond size and credit risk. Some of the smaller bonds can cost $100, while more complex and higher risk bonds can cost up to 20% of the actual bond amount. We have several “programs” which allows us to offer certain bonds at very low prices.
Categorized: General Bond Information
How do I purchase a surety bond?
After identifying the requirements of the bond form, search out a reputable surety agency that writes bonds through highly rated insurance companies. You will then be asked to fill out a questionnaire and possibly asked to provide addition documentation (i.e. Financials) based on the bond type. Request a Quote
Categorized: General Bond Information