MONDAY, NOVEMBER 29, 2021
This is because you do not need to pay the full cost of a surety bond. If you are required to purchase a $30,000 surety bond, for example, you will not have to pay the full $30,000. Instead, you will pay a percentage based on your personal credit score. If you have poor credit, you may pay a higher percentage of a surety bond. On the other side, a good credit score can save you money. Say you are quoted to pay 1% of a $30,000 surety bond. This means you will pay $300 for this surety bond.
To explain surety bond prices, we will break them down by category.
License and permit bonds are bonds that are generally required for individuals and businesses to operate under certain restrictions. Examples of license and permit bonds include:
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Texas Certificate Title Bond: A Texas Certificate Title Bond is a bond that allows you as a vehicle owner to claim ownership on a vehicle if the title is lost, stolen or missing.
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Mixed Beverage Bond: A mixed beverage bond is a type of bond required by states that guarantees those who sell alcohol will pay the proper taxes relating to the sales.
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Over Axle & Weight Bond: An over axle and weight bond is required for businesses who have vehicles that are over the typical weight limit.
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Motor Vehicle Dealer Bond: A motor vehicle dealer bond is required for those who want to sell motor vehicles.
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Notary Bond: A notary bond guarantees that the Texas Secretary of State’s office will pay any losses incurred by the public up to $10,000 on behalf of a commissioned Texas notary.
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Freight Broker Bond: A freight broker bond is a bond freight brokers must obtain in order to renew their license.
License and permit bond costs can vary depending on your location and specific bond. In Texas, a $25,000 bond may cost about $125 a year.
Construction bonds are generally bonds that are required for contractors and entities to work on a certain construction project. Examples of construction bonds include:
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Bid Bonds: A bid bond generally applies when a bidder wins a bid for a project. This bond guarantees that the bidder will complete the proposed project as specified by the bid contract.
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Performance Bonds: A performance bond guarantees that a contractor will complete a designated project. If they are unable to do so, the surety may then find a different contractor to finish the job for the client.
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Payment Bonds: Payment bonds assure that subcontractors will be paid for their work.
Construction bond prices rely heavily on the cost of the project. You may pay anywhere between 0.5% to 2% of a construction bond’s value. If a construction bond is valued at $50,000, for example, you could pay between $250 and $1,000 for the bond.
Fidelity bonds are used to protect a business against possible fraud and theft. Types of fidelity bonds include:
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Dishonesty Bond: A dishonesty bond, often known as an employee dishonesty bond, covers fraud, theft, embezzlement and other types of dishonesty that may be committed by an employee.
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ERISA Bond: Where a dishonesty bond typically covers general employees, ERISA bonds cover employees who specifically manage retirement funds and other employee plans in case of fraud.
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Name Scheduled Bond: A name schedule bond is similar to a dishonesty bond, but it allows the policyholder to list individual employees by name on the policy.
As with construction bonds, fidelity bonds may cost between .5% and 2% of the fidelity bond’s value. The percentage depends on the businessowners’ credit history and the amount of coverage desired on the bond.
Federal bonds generally concern federal taxes regarding businesses. The price of these bonds varies widely. The cost starts a little higher at 1% of the bond’s value. Examples of federal bonds include:
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Federal Brewer Bond: If you brew beer, you will be required to carry a brewer bond that guarantees you will pay the appropriate taxes.
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Property Broker Bond: Required by the Federal Motor Carrier Safety Administration, this bond guarantees that the policyholder will pay for replacement shippers and motor carriers if they fail their transportation contract.
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