What is Surety Bond
A surety bond, sometimes referred to as a guaranty, includes a promise by one party to assume the responsibility for a debt obligation of a borrower if that borrower defaults.
Typically, a surety bond is a promise by a surety company, also known as the guarantor, to pay one party, the obligee, a certain amount if a second party, the principal, fails to meet some obligation, such as fulfilling the terms of a contract.
The surety bond protects the obligee against losses that may arise from the principal’s failure to meet the obligation. The person or company providing the promise is also known as a “surety” or as a “guarantor.”
Who Needs a Bond?
Many different types of individuals and businesses need surety bonds.
Surety bonds provide assurance that an individual or a business will follow a contract or fulfill a duty in accordance with all applicable regulations and laws. They offer a financial guarantee for the employers, project owners and even the public.
It’s always recommended for business owners to evaluate their industry and their own unique business. Many different types of industries and jobs require surety bonds. A few of those include:
- Auto Dealers
- Contractors and Construction Companies
- Debt Collection Agencies
- Insurance Agents
- Medical Equipment Providers
- Gyms and Health Clubs
- Travel Agents
- Notary Publics
Surety Bonds for Auto Dealers
Most new and used auto dealers are required by their state to obtain a surety bond. This surety bond is typically required to be submitted with an auto dealer license application or license renewal. Auto dealers surety bonds provide a financial guarantee that auto sales and other business deals will be completed according to the terms of a sales contract.
Besides auto dealers insurance, used car dealerships are required to obtain a surety bond to do business in their state. Insured ASAP Insurance Agency provides surety bonds for used auto dealers in minutes. Bad credit surety bonds for auto dealers are also available to quote.
Surety Bonds for Contractors
A contractor surety bond is required for those in the construction industry to ensure that they abide by all rules and regulations by the state and local municipalities. Surety bonds also act as a safeguard against poor performance or dishonest behavior.
Construction companies and contractors who are bonded send a clear message to the public that they are financially secure and safe to do business with.
How Much Does A Surety Bond Cost?
There are a few variables that surety bond companies use to determine the cost of a surety bond.
Surety bond rates vary depending on a few variables the bond company uses to determine the price an individual or company will pay for their surety bond. Details such as the financial status of the applicant, the type of bond, the surety amount, and the location are all important factors surety companies use to determine rates.
Applicants with preferable conditions can expect to pay 1 to 2 percent of the total bond amount. Applicants with unfavorable conditions and/or poor credit typically see rates as high as 15 percent of the total bond amount.
Bad Credit Surety Bond
An applicant’s credit score and financial status is the key variable surety bond companies use to determine a bond’s price.
Applicants with bad credit may have their surety bond application denied because of this. If you’re in search of a bad credit surety bond, you’re not totally out of luck. Insured ASAP works with a dozen carriers that offer surety bonds for individuals with less than perfect credit.
How to Get a Surety Bond
Getting a surety bond is a very simple task. It starts with requesting a 3-min surety bond quote over the phone. Once a bond is accepted and payment is made, a bond certificate is emailed within minutes.
An original bond is typically mailed the same day via USPS.
Where to Get a Surety Bond
Insured ASAP Insurance Agency is a leading provider of small business insurance and bonds for auto dealers, contractors and many other industries.
Agents are available now to answer any of your questions or to help provide you with a surety bond quote in minutes. Call us today at (800) 641-7488 for more information.
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