How to get a Surety Bond

When it comes to starting a new business, getting a license or permit, or working on a construction project, one of the tasks you may encounter is obtaining a surety bond. There are thousands of surety bonds across the US, so getting bonded may seem like a daunting task. In this article, we’ll cut through the red tape and go through the steps you’ll ned to take to get a surety bond, as well as suggestions and solutions for any issues you may encounter.

What is a Surety Bond?

First, what is a surety bond? A surety bond is a three-party agreement between the principal (you), the obligee (the entity requiring the bond), and the surety (the company providing the bond). The purpose of the bond is ensure that the principal fulfills their obligation to the obligee. 

For example, the state of California (the obligee) requires all licensed Californian contractors (the principal) to maintain a $25,000 contractor license bond from an approved surety company (the surety). If a licensed California contractor does not carry out their work according to state licensing standards, for example by not completing a job to contract standards, then their customers are entitled to financial compensation from the surety company that the contractor is bonded with. 

Prices for surety bonds can vary widely across different surety companies. This is because each surety company has specialized categories of bonds that they do well in, each with different specialities by bond type, location and credit score. For example, one company may have the best prices for California contractor bonds while another specializes in Florida auto dealers bonds. To ensure that you get the best prices for your bond, we recommend that you purchase bonds through brokers (such as SuretyNow). This is because brokers shop around on behalf of customers to get them the best quotes. 

Who should get a surety bond?

There are many different types of businesses and industries that require a surety bond. Some of the most common industries that require surety bonds include construction, transportation, finance, and healthcare industries. Government agencies also often require surety bonds for various purposes, such as licensing, permits, and bidding on contracts. Here is a list of common professions that require a surety bond: 

  • Contractors
  • Auto dealers
  • Freight brokers
  • Alcohol manufacturers/distributors
  • Janitorial service companies
  • Notaries
  • Tax preparers 

One thing to note is that getting a surety bond may be difficult for certain individuals. If you have a history of claims made against any previous bonds, or if you have a low credit score, it may be more difficult to get a surety bond since surety companies see this as a signal of increased risk. However, this doesn’t mean bonding is impossible. We work with insurance carriers that specialize in providing bonds to individuals with low credit scores or previous claims. Fill out our forms to get a quote and we’ll do our best to get you bonded. 

If you’re worried about getting a bond with a low credit score, do not fret! Here are some quick ways to improve your credit score in preparation to seek a surety bond:

  • Catch up on past-due accounts
  • Ask for higher credit limits
  • Get on top of your bill payments
  • Review your credit report for accuracy and catch any errors
  • Pay off any collections you might have

Basic steps to getting a surety bond

Now that you know what a surety bond is and who needs them, it is time to discuss the basic steps of getting a bond. Here are the general steps, we will go into more detail into each of these steps below.

  1. Determine bond type and amount
  2. Find a surety bond company licensed to sell bonds in your state
  3. Gather the right information and get a quote from the company
  4. Purchase the bond
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1. Determine the bond type and amount

The first step in obtaining a surety bond is to determine what type of bond you need and the amount required. There are many different types of surety bonds, each with its own requirements and specifications.

The most common types of surety bonds include:

  • Contractor's bonds
  • Auto dealer bonds
  • Title bonds
  • Freight broker bonds
  • ERISA bonds
  • Janitorial service bonds
  • Notary bonds
  • Tax preparer bonds
  • Fidelity bonds

There are many more types of bonds, but these are the most common. For most bonds, the primary reason to get them is to get licensed with the state. Usually, the state licensing instructions will tell you the type of bond you need. You should look at your specific situation and needs of your business to evaluate the type of bond suited to your needs. If you are unsure about if a bond is needed or what type of bond you need, give us a call or email and we’ll help you figure it out.

For many kinds of surety bonds, such as an auto dealer bond, the state you are from will pre-determine the bond amount you need. The bond amount is the maximum payout on any claim filed on the bond. However, this depends on the bond type and state.

2. Find a reputable surety broker to shop around for you

Once you know what type of bond you need and the amount required, you'll need to find a surety bond broker to help get you the best quotes. It's important to choose a reputable company with a track record of providing quality service and support. When searching for a surety bond broker, it is important to consider several factors before making a decision. 

Check that the broker is registered: Firstly, make sure the surety broker is licensed and registered with your state. You can verify individual license status for insurance brokers using Sircon and NIPR.This ensures that they are legally authorized to provide surety bonds. 

Check for the broker’s reputation: Additionally, check the company's reputation within the industry by making sure they have real customer reviews online, either on Google or a trusted review site such as TrustPilot. Recent reviews are a good indicator that the broker is still operating effectively. 

Ensure the broker is experienced in the bond you need: Furthermore, it is also important to make sure that the broker provides the specific type of bond you need and has experience in your industry. This is important because there are 1000s of bonds across the US and the broker may not be familiar with all of them. You can evaluate the broker’s expertise by looking at the quality of blog posts that the broker produces for the bond you need or how knowledgeable they seem over communication. 

Get a broker with good service: Finally, consider the level of customer service and support offered by the broker - a reliable and responsive surety bond company will be an important partner in growing your business. What are their hours like? And how quickly they respond to your initial queries are important criteria to consider. The last thing you want when your bond is being denied by the state is a broker that is slow to respond to your questions. 

In summary, the most important considerations when it comes to seeking a broker are:

  1. Properly licensed with Sircon and NIPR
  2. Has reasonable and recent online reviews
  3. Has expertise in the bond you need, demonstrated either via online blogs or seem knowledgeable on the phone
  4. Speed of response and quality of service
  5. Low pricing
  6. Website ease of use

3. Gather the necessary information and get a quote from the broker

The next step is to gather your personal information for an application and submit it to a broker to get a quote. The specific information varies bond to bond, but generally you will need: 

  • SSN (needed for all bonds; used to perform a “soft” credit check that doesn’t impact your credit score)
  • Years of experience (some bonds)
  • Personal or business financial statements (some bonds)
  • Company assets (few bonds)
  • Business plan or other documentation (few bonds)

Here at SuretyNow, we are an online broker, so you can submit your information using our secure forms. We deal with two kinds of surety bonds: bonds that are instantly purchasable and bonds that require underwriting review. 

For instantly purchasable bonds, you can simply fill out our online application and immediately receive a quote. Some common instant bonds include the ERISA bond California tax preparer bond.

For bonds that require underwriting review, you’ll still have to fill out our online form, but we won’t be able to provide you with an instant quote. We’ll take the information you’ve provided and shop it around with our insurance partners to gather quotes. Once we find a quote that we like, we will send it to you over email for you to review. You could then choose whether to proceed. 

The quote you receive is based on a percentage of the bond amount, known as rate. The bond amount and rate go together to determine how much your bond will cost. For example, if your bond amount is $50,000 and you obtain a rate of 5%, you will pay $2500 for your bond. If your rate is 1%, you will pay $500 for your bond.

Here is a brief chart of your hypothetical bond cost assuming your bond amount is $50,000, with different rates.

Bond amount: $50,000
Rate Bond cost/Premium
1% (Best credit score) $500
2% $1,000
3% $1,500
4% $2,000
5% $2,500
10% (Low credit score) $5,000

Once you’ve confirmed that the rate provided suits your situation, you can now follow the instructions provided by the broker to obtain your bond.

4. Purchase the bond

After you have received a quote and decided to move forward with purchasing a surety bond, the next step is to complete the purchase process. For SuretyNow, if the bond is instantly purchasable, then you will be able to checkout on our site using our secure checkout. If the bond requires manual underwriting review, we will send you a secure payment link for payment upon underwriting approval. Once your payment has been received, the surety bond will be issued.

The post purchase process

Each broker has their own post purchase process, but generally speaking, they should at the very least send you a digital and/or physical copy of the bond. The bond also needs to be filed with the state. This may or may not be handled by the broker. 

For SuretyNow customers, we will send you via email a PDF bond certificate as proof of bonding. Depending on the type of bond issued, we may also mail you a physical copy of the bond if it’s needed. This is dependent on the requirements of the state or obligee. If the bond is required to be filed, we will handle any filing that needs to be done. 

Avoiding claims on your bond

An important part of the post-purchase process involves avoiding claims on the bond by keeping the bond in good standing. Broadly, this involves operating your business according to the guidelines set forth on your license and making good on promises to customers. For example, if you are an auto dealer, you should never sell cars without a valid title as that violates your auto dealer license agreement with the state and obligations to the bond. 

If a business/bondholder fails to fulfill their obligations, their customers can make a claim against the bond. The surety company will investigate the claim and, if it is found to be valid, the surety company will compensate the affected customer for their loss up to the amount of the bond. The bondholder is ultimately responsible for reimbursing the surety company for any payments made on their behalf.


Purchasing a surety bond can be a complicated process, but by following these steps, you can ensure that you obtain the bond you need that fits your situation. Remember to do your research, obtain the best quote, and choose a broker that meets your needs and budget. By working with a reputable surety bond broker, you can ensure that you are getting the right bond at the best price. Now that you are more familiar with the general framework of the journey to seeking a surety bond, it is time to begin the first steps; feel free to refer to our experts if any questions arise. Good luck!