Michigan Surety Bond Types
The protection provided by a Michigan surety bond is determined by the bond type and how it functions. Depending on the specific language of the contract, bonds can offer legally-sanctioned protection for businesses, consumers, or government entities by providing financial security. Michigan surety bonds offer protection in many ways:
- by protecting consumers from fraudulent or unethical business practices
- by protecting companies that hire contractors to complete a particular project
- by protecting the state or local government from a business that might break the law
These are just a few examples of the hundreds of ways surety bonds provide protection in Michigan. Although getting a surety bond in Michigan might seem complicated or confusing at first, a little research could go a long way in protecting your investments-and we’re here to help.
Surety bond protection in Michigan
If the principal that filed the bond breaks the contract then the obligee could make a claim on the bond. The surety company will then determine if the claim is valid and, if justified, will compensate the wronged obligee for damages in some way. The principal could ultimately be left paying retribution up to the bond’s full amount. In this way bonds help solidify contracts and prevent financial loss, unlike insurance policies which cover predictable financial losses. Consumers value working with bonded individuals and businesses because they know that their investments are backed by a financial guarantee.
Michigan surety bond costs
Rates and premiums for surety bonds in Michigan vary for a number of reasons, including the bond type and the principal’s financial history. Generally, though, a bond costs between 1 and 3 percent of its face value. So, if the desired bond amount is $10,000, an average principal with a good credit report would pay a $100 to $300 fee to get the bond. However, the surety company will charge more if the principal’s financial history has negative marks because it takes a greater risk in guaranteeing the work. A principal with a poor credit history will need to work with an agency that issues non-standard (or bad credit) bonds, such as Surety Bonds.com.
Getting bonded in Michigan
If you already know the specific Michigan surety bond you’re looking for, browse our library below to see if we currently have form on file. If you don’t see the one you need, contact one of our friendly surety bond specialists to help you.
If you’re still trying to find which surety bond will best fulfill your needs, many resources are available to help you. Typically both state and local government entities post their bonding requirements and regulations online. For instance, the state’s department of licensing website usually outlines which professions require a bond to be secured before a business license can be issued. Mortgage brokers, collection agents and contractors are just some professions in Michigan that must fulfill bonding requirements.
Your Michigan surety bond company
To learn about more bond types and how they work, browse our site; we offer a comprehensive survey of numerous surety bonds. And don’t forget: if you need any help along the way contact a friendly surety bond specialist.
After you know more about the bonding process, completing an online application can be done in just a few minutes. You can usually get a price quote back quickly as long as you are in good financial standing. Securing a bond for yourself or your business is an easy and beneficial investment that provides thorough protection, and we hope to help you along the way.