Surety Bonds 101: How much does a surety bond cost?

Business professionals come to SuretyBonds.com because they’ve been told they need a surety bond by the government agency in charge of licensing/registration for their city/state and industry. Most of the time, these professionals have no idea what a surety bond is, why they need one, how to get one and how much their bond will cost. That’s where our experts come in. Our surety specialists do all of the hard work for you to ensure that you get the surety bond you need quickly, easily and accurately, but we make it a priority to inform our clients about the bonding process from start to finish. We believe that the more you know, the more comfortable you’ll feel allowing us to complete the bonding process on your behalf.

Because most cities/states and industries require surety bonds as part of the licensing process, business professionals should account for the cost of their bond in their start-up budget. But, how can you do that when you don’t know how much your bond will cost?

Several factors impact the price you’ll pay for your surety bond, including:

  • the bond type/amount of risk associated with the bond
  • your personal credit report and other financial credentials (if necessary)
  • the required bond amount
  • the term of the bond

Some bonds can be issued instantly for a flat rate without a credit check, while others require underwriting consideration. To explain further, the experts at SuretyBonds.com have created this guide to surety bond premiums:

Because there are so many different types of surety bonds and each one has a specific underwriting process, it’s impossible to make a blanket statement about how much surety bonds cost. The best way to find out how much you’ll pay for your surety bond is to connect with our team of experts by phone at 1 (800) 308-4358 or online. The SuretyBonds.com surety specialists are here to answer all of your questions and provide you with fast and easy bonding services.

 

Louisiana enacts surety bond requirement for driving schools

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Effective August 1, 2014, private driver training providers in Louisiana must post a $40,000 surety bond to legally work within the state. SB 476, proposed by Senator Gary Smith, states the following:

Ҥ1462. Bond requirement

A. Each private driving school shall execute a good and sufficient surety bond with a surety company qualified to do business in Louisiana as surety, in the sum of forty thousand dollars, if such surety bond is available for purchase. Such bond shall name the Department of Public Safety and Corrections, office of motor vehicles, as obligee and shall be subject to the condition that, if the private driving school or any of the private driving school’s instructors fails to perform any services the school agreed to provide to a student or a student’s parent, that student, or the parent in case the student is a minor, may recover the private driving school fees from the bond by filing a claim through the department against the bond. If the company fails to meet the conditions of the bond, the obligation of the surety shall remain in full force and effect. A private driving school with multiple locations shall furnish only a single forty thousand dollar surety bond.

B. The surety bond furnished as required in this Section shall be delivered to and filed with the office of motor vehicles.”

Private driving school professionals must file the bond document and any licensing materials with the Louisiana Office of Motor Vehicles at the following address:

Louisiana Office of Motor Vehicles
Private Driving School Surety Bond
7979 Independence Blvd.
Baton Rouge, LA 70806

Professionals interested in establishing a privately owned driving school can access more information from the Louisiana Office of Motor Vehicles here. Existing certified driver training school professionals can access more information here.

Although the state has not yet released a surety bond form for this requirement, the experts at SuretyBonds.com are working hard to stay up-to-date on all new information so that you can get the Louisiana surety bond you need quickly, easily and accurately. For more information, or to purchase a surety bond in Louisiana or any other state, give us a call at 1 (800) 308-4358 Monday through Thursday between 7 a.m. and 7 p.m. CST and between 7 a.m. and 6 p.m. CST on Friday. Or, fill out our quick online contact form 24/7.

Delaware enacts surety bond requirement for shellfish aquaculture development areas

On August 1, 2014, the Delaware Department of Natural Resources and Environmental Control adopted 7 DE ADC 3801, which updates regulations for shellfish aquaculture development areas. The new regulations went into effect on August 11, 2014.

The regulation requires a performance bond in connection with an application for a proposed development area. The regulations provide that the prospective leaseholder must furnish and maintain a performance bond in an amount equal to $2,000 per acre leased. The bond secures the aquaculture equipment removal cost-recovery if the prospective leaseholder fails to perform according to the conditions of the lease or fails to maintain the lease.

With adoption of the final regulation, the Division of Fish and Wildlife will submit a permit application to the U.S. Army Corps of Engineers, with the permit needed by the Division to issue shellfish aquaculture leases in the Inland Bays. A permit application could not be submitted specifying the location of Shellfish Aquaculture Development Areas (SADAs), allowable aquaculture gear types and other program aspects until the regulation was final.

The bond requirement is explained in the excerpt below.

“7.0 Shellfish Aquaculture Bonds and Liability

7.1 Prior to obtaining a SADA Shellfish Aquaculture Subaqueous Land Lease, or a Non-SADA Shellfish Aquaculture Subaqueous Land Lease, the prospective leaseholder shall provide evidence of, and maintain for the duration of the lease, a performance bond of $2,000 per acre leased, to provide for aquaculture equipment removal cost-recovery in the event that the prospective leaseholder fails to perform according to the conditions of the lease, or fails to maintain the lease.

7.2 Prior to obtaining a SADA Shellfish Aquaculture Subaqueous Land Lease or a Non-SADA Shellfish Aquaculture Subaqueous Land Lease, the prospective leaseholder shall provide evidence of, and maintain for the duration of the lease, liability insurance of at least $1 million each occurrence and $2 million annual aggregate against loss or liability for bodily injury, death, property damage or destruction occurring within the leased area, or arising out of the use of the lease by the leaseholder or its agents, employees, officers, and visitors. Said policy shall be written so as to provide that the insurer waives all rights of subrogation against the State in connection with any loss or damage covered by the policy.”

The legislation can be accessed via the State of Delaware’s website.

The DNREC announced the changes here.

SuretyBonds.com is still waiting for more details from the state regarding this new surety bond requirement, but our experts are here to answer any questions you  have and assist you with your surety bond needs in the meantime. Give us a call at 1 (800) 308-4358 between the hours of 7 a.m. and 7 p.m. CST Monday through Thursday and between 7 a.m. and 6 p.m. CST on Friday. Or, fill out an online bond request 24/7.

Colorado increases surety bond requirement for driver training schools

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On June 10, 2014, the Colorado Department of Revenue Division of Motor Vehicles revised its regulations for commercial driver training schools. Although the previous regulations required such educational institutions to post a surety bond, the new requirements increase the required bond amount from $2,500 to $10,000.

A commercial driving school is defined as any business or any person who, for compensation, provides or offers to provide instruction in the operation of a motor vehicle, and is certified by the Driver Testing Education Section of the Motor Vehicle Division. The aforementioned does not include secondary schools and institutions of higher education offering programs approved by the Department of Education and/or private occupational schools offering programs approved by the private occupational school division.

The changes are explained in the excerpt below.

“(200) GENERAL REQUIREMENTS FOR COMMERCIAL DRIVING SCHOOL CERTIFICATION”

“g) Insurance: All CDS must have: proof of current and valid vehicle insurance, vehicle registration, general liability insurance, surety bond, and worker’s compensation insurance on file with the Department at all times.”

“h) All CDS’s shall maintain a surety bond, executed by a surety company authorized to do business in Colorado, in the amount of $10,000 with the Department.

1. The bond shall be for the use and benefit of the Department in the event of a monetary loss within the limitations of the bond attributable to the willful, intentional, or negligent conduct of the CDS, or its agents or employees.

2. The bond may be used to indemnify against loss or damage arising out of the CDS’s breach of contract between the CDS and the student.

3. If the amount of the bond is decreased or terminated, or if there is a final judgment outstanding on the bond, the CDS’s certification shall be suspended. The suspension shall continue until satisfactory steps are taken to restore the original amount of the bond.

4. The Department shall be named the beneficiary on the bond.”

These updates to 1 CCR 204-3 Driver Testing and Education Program Rules and Regulations (Recodified as 1 CCR 204-30 Rule 8) can be accessed via the Colorado Secretary of State website.

The experts at SuretyBonds.com are familiar with the update to this surety bond requirement and are here to answer any questions you have and get you the surety bond you need quickly, easily and accurately. Give us a call at 1 (800) 308-4358 between the hours of 7 a.m. and 7 p.m. CST Monday through Thursday and between 7 a.m. and 6 p.m. CST on Friday. Or, fill out an online bond request 24/7.

Maine establishes surety bond requirement for registration agents

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On April 2, 2014, the Maine Bureau of Motor Vehicles adopted regulations that outline the licensing requirements for non-governmental registration agents. A registration agent in the state is authorized to do the following:

  • collect registrations, titles and related taxes and fees
  • issue registration credentials
  • transmit registration data to the Bureau of Motor Vehicles
  • process motor vehicle registrations and annual and long-term trailer registrations
  • have plate and validation inventory and issue motor vehicle credentials

The licensing requirements include the submission of an application (provided by the Bureau) and the reception of written authorization to operate following application approval. The full Non-Governmental Registration Agent requirements can be downloaded here.

The new regulations adopted into law also require approved agents to post a surety bond in the the amount of $25,000. This bond is payable to the Bureau and must be filed within 10 days of receipt of written authorization. The surety bond may be called on by the Bureau if “the registration agent is in breach of the terms and conditions of authorization, or refuses or fails to pay registration-related taxes and fees.” A registration agent must maintain the bond for the entire period for which they are authorized to act as a registered agent. In the event of cancellation, in which the Bureau must be notified in advance of at least 30 days, the bond must be replaced with no lapse of coverage.

The experts at SuretyBonds.com are familiar with this new surety bond requirement in Maine and are ready to assist you with all of your bonding needs. If you have questions or are ready to purchase your bond, give us a call at 1 (800) 308-4358 or submit an online bond request. Our expert surety specialists will you walk you through each step of our fast, easy and accurate bonding process.