A surety bond (pronounced “shur-ih-tee bond”) can be defined in its simplest form as a written agreement to guarantee compliance, payment, or performance of an act. A surety is a unique type of insurance because it involves a three-party agreement. The three parties in a surety agreement are:

Principal – the party that purchases the bond and undertakes an obligation to perform an act as promised.
Surety – the insurance company or surety company that guarantees the obligation will be performed. If the principal fails to perform the act as promised, the surety is contractually liable for losses sustained.
Obligee – the party who requires, and often receives the benefit of— the surety bond. For most surety bonds, the obligee is a local, state, or federal government organization.

Commercial license and permit bonds have a statutory amount (coverage) for California Debt Collectors it is $25,000.

States with the most surety bond requirements include California, Florida, and Texas.

Most people and businesses have no idea what a surety bond is until they are told that they need to post a surety bond. Once you are informed that you or your business must furnish a surety bond, it is a good idea to do some online research on the specific bond requirement. You should also start by contacting an agency that specializes in providing surety bonds. These agencies are knowledgeable about the various requirements, they typically work with reputable A-rated surety bond companies, offer competitive pricing and can guide you through the process of securing your surety bond.

As part of the surety bond application, the applicant will usually need to provide basic information on the business and its owners such as names, addresses, and years in business. The application information may also include employer identification numbers, social security numbers, and occupational license numbers so underwriters can review personal and business credit history. In some cases business and/or personal financials may also be requested by the surety company.

Getting a surety bond is typically a quick and painless process. Frequently, applicants can be approved the same day and receive the surety bond the next day. Some bonding companies have simple user friendly online quote request forms that only take a few minutes to complete. An applicant will typically need to be prepared to provide basic information about the bond required, the business, personal information such as name, address, and social security.

Much of the underwriting is automated to allow for rapid approvals and pricing. In some cases, additional information may be required of the applicant but this information can usually be sent to the agent electronically.

The only place that you may need to wait is when submitting your bond to the obligee if they require submission of the bond and your application documents in person.