Sign License Surety Bonds

While they're often a hidden aspect of doing business, surety bonds are a legally required part of many industries. Required by many federal, state, and local governments as well as some private parties, surety bonds are more common than the average person would imagine and, if you're considering investing in outdoor advertising like billboards and signs, many states and localities have legislated that you must have a sign license surety bond in place before you begin your business activities.

A surety bond is an agreement between three parties: the person or entity which takes out the bond, the person the bond will benefit should a claim be filed against it, and the bond company, who executes the bond. The bond ensures that the person who purchased the bond (usually at the request of the person who the bond will benefit) will perform according to the laws and statutes governing their particular business activity and will act ethically in all business dealings. If a valid claim is filed against the bond due to the business's negligence or unacceptable business practices, the surety bond company pays the harmed party a settlement amount from the bond.

Because receiving a sign license surety bond or any other type of surety bond usually represents a potentially large financial obligation (up to the full value of the bond), surety bond companies need to ensure that the company to whom they're selling the bond can meet these obligations. To this end, the surety company will usually require a credit check and financial statements in order to execute the bond. If you're in need of a sign license bond, it will benefit you greatly to have good credit and excellent, complete financial statements. Consider ordering a copy of your D&B report or credit report prior to applying for your bond to ensure that you're financially able to qualify. Bonds for companies and individuals with subpar credit do exist, but you can anticipate rates that are up to twice that of companies who have good credit.

Sign license bonds are generally inexpensive to purchase, and states and localities who require them typically require the face value of the bond to be around $25,000 to $50,000.