Surety bond types
A surety bond is a three-party guarantee: you promise to follow the rules, a surety backs that promise, and whoever you serve can file a claim if you don't. Most are required to get a license or win a contract. Here are the most common types and what each one is for.
Contractor license bond
AvailableMost states require this before they'll issue or renew a contractor license. It guarantees you'll follow state building and licensing laws — if you don't, customers or the state can claim against it. Required amounts run from about $5,000 to $50,000 depending on the state and trade.
View requirements →Auto dealer bond
Guide soonEvery licensed motor vehicle dealer needs one before the DMV will issue a dealer license. It protects buyers and the state against fraud, unpaid taxes, and title problems. Most states set the amount between $10,000 and $75,000.
Freight broker bond (BMC-84)
Guide soonThe federal bond the FMCSA requires for every freight broker and forwarder. It's a fixed $75,000 and guarantees you'll pay carriers and shippers what you owe. Without it, you can't keep your broker authority active.
Notary bond
Guide soonMany states require notaries to post a small bond before they're commissioned. It protects the public from errors or misconduct on notarized documents. Amounts are usually $5,000 to $15,000, and the premium is just a few dollars a year.
Mortgage broker bond
Guide soonA licensing bond for mortgage brokers and lenders, set by your state and registered through the NMLS. It guarantees you'll follow lending laws and protects borrowers. Amounts vary widely by state and loan volume.
Performance bond
Guide soonUsed on construction projects to guarantee the work is finished according to the contract. If the contractor defaults, the bond covers the cost to complete the job. The amount is typically the full contract value.
Not sure what a bond will cost? The surety bond cost calculator gives you a premium estimate in seconds.
Surety bond FAQ
What is a surety bond?
A surety bond is a contract between three parties: the principal (you), the obligee (whoever requires the bond, usually a government agency or customer), and the surety (the company that backs your promise). It guarantees you'll meet a legal or contractual obligation. If you don't, the obligee files a claim, the surety pays it, and you repay the surety.
How much does a surety bond cost?
You pay a yearly premium, not the full bond amount. For most license and contractor bonds it's about 1–3% of the bond with good credit, and more while your credit is building. Small bonds often carry a minimum premium around $100.
Is a surety bond the same as insurance?
No. Insurance protects you. A surety bond protects the people you serve and the agency that requires it. If there's a valid claim against your bond, the surety pays the claimant, but you have to pay the surety back.
How do I get a surety bond?
Pick the bond your license or contract requires, apply with a licensed surety (they run a soft credit check), pay the premium, and you get your bond. Then file it with the agency that asked for it.