A surety bond is a three-party agreement between you, the state, and a surety company. If you fail to meet your legal obligations, a claim can be paid to the harmed party — and you repay the surety.
Bond amount vs. what you pay
States set a required bond amount. You do not pay that full amount; you pay a premium, which is a percentage of it. Your premium depends on the surety's underwriting, which often considers credit history and business experience.
Get quotes from more than one surety agency. Pricing varies more than most first-time applicants expect.
The bond protects the public
A bond is not insurance for your business. If a claim is paid, you are responsible for reimbursing the surety. That is why clean paperwork and honest disclosures are not just ethics — they are risk management.
Common questions
- Can I get a dealer bond with bad credit?
- Sometimes, at a higher premium. Underwriting varies by surety. Talk to an agency directly about your situation; no outcome is guaranteed.
Educational information only. Regulations and licensing requirements can change. Verify requirements with the appropriate government agencies and qualified professionals before acting. No financing, credit approval, licensing approval, revenue or business outcome is guaranteed.