Colorado Surety Bond Types
Colorado surety bonds protect consumers, businesses, and government entities by holding professionals accountable for the actions and decisions they choose to make. Since each type of bond functions differently, the specific protection the bond provides will vary as well. Although understanding the bonding process in Colorado might initially seem complicated or confusing, a little research could go a long way in protecting your investments and we’re here to help.
Surety Bond Basics
Surety bonds are typically required by a government entity to discourage a wide array of individuals and businesses from participating in illegal activities or making other unethical decisions. Should the bonded entity (or principal) choose to act inappropriately, then the wronged party (or obligee) can make a claim on the bond. If the claim is confirmed, the surety company will be forced to fulfill the obligations outlined in the bond, or else pay the obligee for damages up to the bond’s full value. This is the major difference between insurance policies and surety bonds: while insurance policies offset likely, predictable financial losses, bonds aim to prevent unethical business practices to avoid financial losses.
Colorado surety bond costs
The penal sum and fee set for a surety bond varies depending on a number of factors, including the type of bond being issued and the principal’s financial standing, among other determinants that a surety company might consider. Most bonds usually cost between 1 and 3 percent of the bond’s total penal sum. For instance, if the desired bond amount is $10,000, a typical principal with a good credit report would probably pay about $100 to $300 for the bond. However, the bond’s cost will be higher if the principal’s financial history has negative marks, as this means the surety takes a greater risk in backing the principal’s work. A principal who has a poor credit history will need to find a surety bond agency like Surety Bonds.com that issues non-standard (or bad credit) bonds to high-risk clients.
Getting a Colorado surety bond
If you already know the specific Colorado surety bond you’re looking for, browse through our library below to see if we already have the form on file. If you donÂ¹t find exactly what you’re looking for, contact one of our friendly surety bond specialists to help you find it.
There are also plenty of resources available if you’re not sure which bond will best fulfill your needs. Most state and local government entities post their bonding requirements online to help consumers better understand the process. For example, the state’s department of licensing website usually outlines stipulations that require a surety bond to be secured before a business can be licensed to operate within a state. Various professionals in Colorado from contractors to auto dealers secure a surety bond to protect their clients.
Your Colorado surety bond agency
We have an extensive collection of different bond types, so browse our site for specific information about how different bonds work. As always, contact a friendly surety bond specialist if you need help at any point during the process.
After attaining a basic understanding of the bonding process, applying for a bond online can be completed in just a few minutes. If you have a good credit report and financial history, you can usually get a price quote back quickly. Securing a surety bond for yourself or your business is an easy and worthwhile investment that offers a great deal of legal financial protection that both you and your consumers will appreciate.