If you’ve been told you need a surety bond, you might be lost as to where to start. Getting a surety bond is a not a complicated process, but many questions can come up along the way. This post answers the most common questions in regards to getting a surety bond.
Need help with more general questions? Check out our Surety Bond FAQ.
How to get a Surety Bond: Where To Get A Bond
Q: Can I get a surety bond through my insurance company?
A: Yes, if your insurance company is licensed to issue surety bonds in your state. Insurance companies have been the traditional way of securing a bond, but you can also get a surety bond through a specialty surety bond company.
Q: Does it matter where I get my bond?
A: Yes and no. No, it doesn’t matter where you get your bond, as long as it is a reputable company and as long as your bond is not a fraudulent bond. Where you get your bond could impact how much you’ll pay and how easy the process will be.
How to get a Surety Bond: Process Questions
Q: How do I get a surety bond?
A: Once you know what kind of bond you need, the process is simple:
1. Submit an application
2. An underwriter will evaluate your risk and determine your bond rate
3. View quotes
4. Sign indemnity agreement
5. Pay for bond
You can learn more about how to get a surety bond here.
If you don’t know what bond you need, you can use this interactive tool to help you out.
Q: What is an indemnity agreement and why do I have to sign it?
A: An indemnity agreement is a legal document that fully discloses your obligations in the surety bond relationship. You have to sign it because it allows the surety bond company the right to recover any losses paid out on behalf of you.
Q: What if I have trouble qualifying for a bond?
A: When you apply for a bond, you might lack the financial strength or experience to qualify for a bond directly from a surety company. Many surety companies have bad credit options available for people who need to get bonded.
Likewise, companies may be able to obtain backing from the US Small Business Administration. SBA backing can help companies that may have trouble qualifying for a necessary surety bond.
Q: Do I have to pay the full bond amount?
A: No, you will only pay a small percentage of the full bond amount. Generally, this percentage is between 1-4%. The price you pay for your bond is called the bond premium.
Q: What if I can’t pay my bond premium up front?
A: Surety bonds can be expensive and many people think that because they can’t pay their full bond premium up front, they can’t get bonded. This is not true. Many surety bond companies have financing for bonds. To learn more about financing click here.
How to get a Surety Bond: Time Questions
Q: How long does it take to get a bond?
A: The length of time from application to issuance will vary depending on the type of bond. Many bonds can be approved instantly online upon completion of an online application. These bonds can be issued one to two days after receipt of payment and a signed copy of the indemnity agreement.
To apply for a bond online, click here.
Q: How long does my bond remain in effect?
A: Your bond will either have an expiration date or run continuous until cancelled or non-renewed. You can tell what kind of bond you have by looking at your bond form.
Q: I have a bond that needs to be renewed. When do you need to renew it?
A: If you have a bond that needs to be renewed by a certain date, you will receive an invoice for the renewal payment a couple months before your bond expires. You must pay the renewal payment before the expiration date to avoid cancellation of your bond.
If you need a bond, but don't know where to start, let Surety Solutions help make the process easier. We are a surety company licensed in all 50 states. We have relationships with over 30 of the top insurance carriers in the nation which means we can not only get you bonded but at the best rate.
Try our Bond Cost Calculator today and compare prices before you buy.