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What is a Commercial Bond?
Commercial & General Business Bonds
Generally required by a municipality or other public entity as a condition to granting a license or permit to engage in a specified activity or as a matter of financial obligation as part of doing business. This bond type guarantees the bonded party will comply with the underlying applicable laws, regulations and/or financial obligation.
License and Permit Bonds: The most common types of bonds. Almost every business which needs a license or permit to do business requires a bond to guarantee the owners honesty, integrity, performance and payment. In most cases, license and permit bonds are requested by a municipality, state or the Federal Government.
Miscellaneous Bonds: General (non contracted) business bonds that are required by a government agency or private group that is not in regards to a license or permit is referred to as Miscellaneous. A couple examples of miscellaneous bonds are utility guarantees, tax bonds or wage and welfare bonds.
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FAQs About Commercial Bonds
How much does a commercial bond cost?The cost of a commercial bond will vary based on a few different factors including the type of bond requested, the risk associated with the bond type, and the length of the bond's term. Some commercial bonds are set between 1% and 3% of the bond amount and do not require a credit check while others may need to be reviewed by an underwriter changing the premium amount. Personal credit, work history, bond history, and business financials are all looked at when a bond needs to be reviewed. The more financially stable a person and business are, the lower the premium amount will be.
Who needs to purchase a commercial bond?A commercial bond is usually needed for companies or individuals who must obtain a state license or permit to work legally. Commercial bonds protect consumers from financial and physical harm from a business owner. Commercial bonds are not contract bonds and therefore do not have a guarantee associated with them. These bonds are meant to protect customers, not promise the performance or payment of something the way contract bonds do. If you are a business owner and need a license or permit in order to abide by federal, state, or local legislation, you likely will need a commercial bond as well.
Who is involved in a commercial bond?Like all bonds, there are three parties involved in a commercial bond agreement.
The Principal: This is the person who has requested the bond and is responsible for upholding the requirements and standards set in the bond agreement.
The Obligee: This is the party who is requiring the bond and the recipient of the obligation set in the bond agreement if the principal is to fault on the bond.
The Surety: This is the agency that ensures the principal's obligation to the obligee.
How can I obtain a commercial bond?In order to obtain a commercial bond, you will need to get in contact with a surety agency. The Surety Place has the ability to write any bond in any state. Our team of underwriters is knowledgeable in all federal, state, and local legislation which help to make your job easier. We know which bonds are needed for each industry. We can get you the bond you need; we say yes when no one else can. Big or small, we provide the bonding solutions you need to run your business successful.
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Why Choose The Surety Place
National Surety and Bonding Account Management Group
The Surety Place, previously known as Surety Placement Services, was founded in 2002 with a goal to bring innovation and a high level of service the industry had not yet seen. As an industry leader from the start, we are a people first surety bond partner that you can trust, offering access to agents and businesses to achieve the right solution at the right time.
A National Company with A Smalltown Feel
We differ from other surety agencies because we establish a relationship with you in order to truly understand your business focus whether large or small, complicated or simple. As one of the only true specialists within the industry, we supply access, partnerships and specialty programs with numerous “A” rated sureties across the nation. We are here to help you service all your bonding needs with no appointments or contracts necessary.
Because of our industry knowledge and expertise coupled with our ever-increasing specialty programs, we have the unique ability to write your bonds when no one else can, and because of our relationship with you, we will stand behind you in support to achieve your agency or business objectives. Obtaining your commercial bond gets easier when you choose The Surety Place as your bonding solutions agency.
Over 50 Years of Combined Surety Experience
Our dedicated account managers are highly trained underwriters who provide our agents and clients a tailored bonding solution for their individual or corporate needs. In today’s marketplace, surety access can be limited; but with Surety Place as your partner, you’ll find the white-glove service you have been looking for.
We understand business. We also understand how difficult it can be when something that seems like such a small piece of the puzzle gets in the way of closing the deal or moving forward. We take that pressure off your mind so YOU can get back to work.
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At The Surety Place, we pride ourselves in our customer service! If you have any questions regarding a bond placement, give us a call.