How To Get A Surety Bond

  • June 19, 2024
  • 8 min read

So how do you get a surety bond when one is being requested from you? Well, what is an surety bond first? A surety bond is basically a guarantee by a bonding company that something is going to happen or that you’re going to do something or they’re backing up what your words are. The most common type of bond I’m sure you’ve heard of is a bail bond. A bail bond says you’re going to show up in court. You hear about that one because it’s always on TV shows, right? On cop shows and, uh, police and courtroom shows like Law and Order.

Types of Bonds
But there are many other types of bonds. In fact, charity bonds for bail bonds is not the most common type. The most common types are licensed bonds and performance bonds. What does that mean? Well, you see on the screen we have one example of an appraisers board surety Bond. So if you’re going to be a real estate appraiser in Most states, this happened to be Georgia. You go through a licensing exam, you have some training, you have to do a bunch of background checks and then you have to post the bond with the state real estate appraisers board You can see that’s an official government entity they’re the ones who are who are requiring this Bond why do they want a bond? They want to make sure there’s a bond in case you mess up and you don’t do something correct as a license appraiser because they gave you the license from the government If you mess up, there’s a bond that will help pay any losses that customers have or your clients have.

Wide Range of Professions
So many types of licenses you need to buy a surety bond Insurance appraisers real estate agents attorneys contractors electricians there are hundreds of types of professions that the professional needs to have a surety bond I’m sure you’ve seen trucks driving around maybe a contractor says licensed bonded and insured right many types of licenses require a surety bond and or insurance.

Process of Obtaining a Bond
So how do you get one if you are filing for a license or you’re filing for a contract well first you have to contact a shy company you can see on the link below one one that uh we’re associated with that we recommend is called and and like any other bonding company they are one of three parties to every Bond every bond has three parties one is called the surety that’s the company the insurance company that’s writing the bond the other one is called the oblige the oblige is the person demanding the bond okay um in this case the obligate would be the Georgia real estate appraisers board if you’re getting let’s say a contractor’s license it might be the contractor licensing board if it was let’s say the court it might be the Circuit Court they’re the oblige they’re the one who’s getting the obligation from the principal which is the third party the principal is the person that purchases the bond from the surety from the first party so if you are uh Sally Smith real estate appraiser you would be the Principal the the oblige the real estate appraiser board would say Sally Smith you need to buy a surety bond in order to get your license and Sally Smith would go to the surety which would be let’s say and buy the bond the bond will be signed and executed by the submitted to the to the oblige and you get your license licenses are only one type of surety another type of surety bond is a performance bond or a contract Bond let’s say you are a general contractor and you’re being hired to build a bridge and the client is putting out bids I want you to bid on building this bridge across this River okay I’m going to bid 4,800 $4 million 800,000 okay and somebody else build bids 5 million somebody else builds uh bids 5 .5 million and the client says you know we like this low bid but we’re worried that because it’s a low bid maybe they won’t be able to finish the bridge maybe they bid too low maybe they made a mistake in the math maybe they just are desperate for business so we’re going to require that you purchase a performance bond or a contract Bond so if you don’t finish the bridge the bond steps in and pay somebody else to finish the bridge right so in that case you would be the Principal as Bob’s Builders the oblige would be let’s say the city that’s building that’s hiring you to build a bridge and the surety again would be the company like probbonds and that that surety Bond helps the client have confidence in you that they know you’re set you’re good for this bridge right you’re going to be able to finish the job and if you don’t somebody’s here with de pockets is going to pay the money now keep in mind that surety companies if they have to pay out they go to you to look to get paid back and we’ll talk about that in another video so be sure you know what you’re getting into.

Obtaining a Bond
So the way you get a bond it’s very simple you select what type of bond you want and pro bonds has a very good dashboard for this you select what kind of bond you want what state it’s in how much it is hit enter And It quotes it out so let’s take a look at one at probonds right let’s say Georgia we we’re going to use the example from the last page Georgia search for bond by keyword well what were they calling it over here they were calling it a real estate appraiser board use as least words as possible let’s just start typing in real estate and let’s just go with real estate let’s just see if that’s enough let’s hit search and see if anything comes up can’t find what you’re looking for okay let’s just type in appraiser search so once I pulled that up you’ll see that it’ll ask some basic questions It’ll ask how much the bond amount is for in this case 20,000 the price for the bond is going to be 200 the dates it’ll have what type of entity is it a partnership LLC it’ll have some basic information about um the business details what the address contact person um and then click the button I’m not a robot click the button for payment and then you can review the bond form and download it it’s pretty straightforward happens pretty fast so once you know what kind of bond you want just go right into the app start clicking buttons next thing you know you can normally get a bond instantly if the bond is more than about 50 or 60,000 sometimes they have to do a little bit of manual underwriting that might take a little longer but normally it’s pretty quick.

Consultation and Further Information
So that’s a quick run through on how to get a bond if you do have more questions about what goes into a surety bond and what are the parameters what are the criteria you can click the link below you can arrange a consultation with a licensed shy Bond producer normally myself one of our other agents we’d be glad to be of assistance but that’s a good way to obtain surety bonds and how they’re used to help further a business or to help satisfy the requirements of some government agency thank you for watching another video at actual and describe. TV remember if you have questions or comments about our videos put them in the link below also remember that you have availability and access to live one-on-one question and answer consultation with a licensed expert in a number of fields investigations insurance surety bonds civil court mediation even things like real estate records research real estate brokers real estate uh mortgage lenders in addition you’re going to find that experts are available in business segments Business Development marketing advertising certified licensed experts so if you do find this content valuable and you want to delve more deeply into a subject you can’t ask YouTube a question right but if you want to talk to somebody live and actual human use the link below thanks for watching.

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