Many people do not understand why they need to obtain surety bonds, let alone understand what they are. If you want to find out why you need a surety bond, you have discovered the right place.
An obvious answer to this question is because it’s being required of you (by the obligee). Why is the obligee requiring a surety bond of you in the first place? If no one is requiring a bond of you, you are looking for a fidelity bond, not a surety bond. Watch our video to learn more about fidelity bonding.
How Do Surety Bonds Work?
Surety bonds are required to protect the public. They guarantee obligations will be fulfilled, whether it’s a construction bond guaranteeing a public construction project will be completed, a license bond guaranteeing an auto dealer will abide by the laws or a court bond that guarantees a legal guardian will handle a minor’s finances properly. These specific examples are a small overview of the hundreds of surety bonds out there, but they all have one thing in common; they protect the public, not you.
Your Surety Bond is a Form of Credit
You might wonder “how does paying for a surety bond guarantee anything or protect the public?”, and that’s a great question! When a surety company provides you with a surety bond, which you learned is a guarantee; they are vouching that you will follow the bond terms. If the bond guarantee is not fulfilled and damages are caused, a claim can be filed. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.
Taking an example from above, if a contractor that was hired to make structural improvements to a building walks off the job before completion; a claim can be filed. The surety company will hire a new contractor to finish the project and pay the claim initially, but will come back to the bond holder for reimbursement of the claim, along with any additional costs incurred to get the rest of the job done. As long as you operate ethically and according to the bond terms, you have nothing to worry about, and the public has a layer of protection from the deceitful. Keep in mind, it's crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.
Still Have Questions?
Now you know why you need a surety bond. If you still have questions, feel free to leave a comment below, contact a bond expert in our office or take a look at the most frequent surety bond related questions here.
In reply to by admin
I am starting a medicaid transportation company and the company who sends out the business or clients is requiring a surety bond. What kind is this
In reply to by admin
Medicaid transportation business. What type of bond is needed and also I was told I need the amount to be 25000. What is the cost of that?
In reply to by admin
Nathaniel,
It sounds like you're looking for a Medicare/Medicaid bond. Costs vary quite a bit depending on the personal credit of the owners.
You can apply for a free quote on our website here https://www.jwsuretybonds.com/estimate
In reply to by admin
hello. I've been ordered in court to obtain a surety bond in the amount of $2,500 visitations with my son are suspended until I do. the bond is to ensure I keep my minor child away from one individual. I'm unsure about how to get this type of bond and every company I call is clueless to what I'm talking about. please help me by explaining what this is and how I can get one. I need to know also if there is a way to do this inexpensively. this is in Oklahoma. thank you.
In reply to by Sam
Sam,
I just spoke to our court bond department, and they have never heard of anything like this.
Your best bet is to contact the court and determine exactly which type of bond they are requiring of you.
In reply to by admin
I thinking about having a data services business where I would be inputting data, filing and stuffing envelopes for them. Will I need to be bonded? If so, where do I go to get license.
In reply to by Lila Livingston
Lila,
It would be best to contact your state directly to determine:
1) If obtaining a license is a requirement for your line of work, and how to obtain one if it is required (as every state has a unique process)
2) Whether a surety bond is required to obtain the license/operate legally
Let me know if you have any other questions.
In reply to by admin
I filed an appeal in court for a decision . They are asking for 99.000. vet bills. Do I have to post a bond for this. If I need to post this bond how do I do this and how much will it cost and how long I have.t
In reply to by shirleycorgan
Shirley,
You only need a surety bond if it's required of you. Is anyone requiring a bond of you such as the court?
In reply to by admin
My son in-law is executor of his mothers estate. He needs me to sign a surety bond for him... Is this common practice and what does it mean for me?? thanks
In reply to by Carol
Hey Carol,
Who told you that you needed to sign the bond? Your son in-law will have to sign the bond as opposed to you, as the bond is a guarantee he will handle all responsibilities as an executor.
Let me know if you have any other questions.
In reply to by admin
I will be applying for an auto dealers license an need a surety bond what is the normal cost do I have to have the 10, 000 that the bond is required to be?
In reply to by Quinton
Hey Quinton,
The cost is only percentage of the bond amount, which is based on personal credit. You can get an instant quote directly on our website here:
https://www.jwsuretybonds.com/estimate
In reply to by admin
I bought a car and lost the title, i have to get a bonded title. My question is if i get a bonded title and pay for a surety bond on it, will i get the money back?
In reply to by Aaron
Aaron,
If you're referring to the surety bond premium, no you will not get the money back. Bond premiums are fully earned.
In reply to by admin
My brother recommended I would possibly like this blog. He was once entirely right. This post truly made my day. You cann't believe just how much time I had spent for this information! Thank you!
In reply to by Awe Inspiring Pieces
I'm happy we were able to help!
In reply to by Glenn
Hey Glenn,
We cannot advise on what particular items can or cannot be paid out of the VA account. You'll need to contact the VA for that information.
Sorry I couldn't offer more help.
In reply to by admin
We are young plant brokers in Florida. We do not come in contact with the plant material as these are shipped from assorted greenhouses. Are we required to have a surety bond? We are co-owners, one with excellent credit, and the other, due to a divorce poor credit. We've applied for a bond of $35,000.00 and been quoted $3,000.00 This seems really excessive & unreasonable. We've been told its due to the poor credit of the one co-owner.
In reply to by Greg
Hey Greg,
I'll need some more information to help. Is someone requiring a surety bond of you? If so who, and what type?
In reply to by admin
It's possible you need a lost vehicle title bond, but you'll want to ask whoever is requiring the bond of you.
In reply to by Randy
Hey Randy,
No, you will not be reimbursed for the bond. When you purchase a bond, you're essentially buying a form of credit from the surety company that ensures you'll abide by the rules set by the executor bond. Let me know if you need help getting your bond.
In reply to by admin
Hey Majeed,
This sounds like a surety bond required by a private party, which we don't handle. Just to be sure, who's requiring the bond of you?
In reply to by admin
RECENTLY MY VEHICLE WAS THEFT AND I HAVE LODGED FIR AGAINST IT. NOW THE VEHICLE IS FOUND AND I REQUIRE SURITY TO GET IT RELEASED FROM COURT. WHAT TYPE OF SURITY I HAVE TO PROVIDE? PLS HELP
In reply to by nanci
Most of the time no Nanci. A defendant is required to stay within the state and usually to a specific area depending on the type of bond he is out on. If he's also on a GPS tracking device and he leaves the state he will most likely violate his release conditions and be revoked and sent back to jail.
In reply to by admin
Hey Doug,
In order to answer accurately, I'll need more details as to what you want to know. If your business closes, what do you want to know regarding a surety bond in place?
In reply to by admin
I had ITEK shares and sold it through escrow agent. my money is on hold and they are asking surety bond about 10%
why do I need to surety bond?
In reply to by admin
What if my business collapses and I'm not financially able to provide services? What then?
In reply to by admin
My son has asked me to co-sign a $1700 surety bond for his music booking company. What is my liability in doing this?
In reply to by Ellen
Hey Ellen,
When you are cosigning on a Surety Bond you are accepting the liability of the face amount of the bond plus any legal fees that could incur if there was a full bond loss. This would only affect you should your son have a claim against the bond and not be able to repay it. I strongly suggest you have your son complete an application on our website if you want to avoid co-signing. 99% of the time we do not require cosigners so it could get you off the hook. Below is a link to our application:
https://www.jwsuretybonds.com/estimate
Thank you for visiting our website!
In reply to by Bob
Bob,
It sounds like they may want you to obtain a fidelity bond or a private type of bond, which we don't handle. You can obtain those at a local insurance agency.
Contact the subdivision to find out exactly what type of bond they are requiring of you.
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