Surety Bond Cost Calculator
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About Surety Bonds
A surety bond is a three-party agreement where the surety company guarantees to a third party (the obligee) that you (the principal) will fulfill your contractual or legal obligations. Unlike insurance, a surety bond is not designed to absorb losses — if a claim is paid, you must reimburse the surety. License bonds are required by government agencies to obtain business licenses. Performance and payment bonds guarantee that construction contracts will be completed. Credit score is the most important factor in surety bond pricing: applicants with good credit (700+) can expect rates of 1–3%, while those with poor credit may pay 5–15% or more of the bond amount.
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Frequently Asked Questions
What is the difference between a surety bond and insurance?
Insurance protects you from unexpected losses you didn't cause. A surety bond protects the obligee (the party you're bonding to) from your failure to perform. If a surety bond claim is paid, you are obligated to repay the surety company.
Who requires surety bonds?
Government agencies often require license bonds for contractors, auto dealers, mortgage brokers, and other licensed businesses. General contractors may require performance and payment bonds from subcontractors on large projects.
How does credit score affect surety bond rates?
Credit score is the primary underwriting factor. Applicants with excellent credit pay the lowest rates (1–2%). Poor credit applicants pay significantly more (5–15%) because they represent a higher risk of claim and non-repayment to the surety.
Can I get a surety bond with bad credit?
Yes, but at a higher cost. Bad credit surety programs exist for applicants with scores below 600. Rates are higher and some bond types may require collateral. Building your credit over time will significantly reduce bond costs.
How long does a surety bond last?
License bonds typically renew annually. Contract bonds (performance/payment) last for the duration of the specific project or contract. Court bonds last until the court proceedings are concluded.
Results are estimates only. Actual bond rates depend on your specific credit profile, bond type, and underwriting review. Consult a licensed surety bond professional for an accurate quote.