What does a surety bond cost? That’s among the most common questions we receive at SuretyBonds.com.
It tends to produce a rather unsatisfactory answer, although it’s true nonetheless. The reality is that surety bond cost is going to depend on a host of factors, including the type of bond you’re seeking and what kind of financial background you possess.
Some bonds are considered near no-brainers. These are often low-cost, low-risk surety bonds that give underwriters little pause. But some of the costlier and more high-risk opportunities trigger a significant examination and increased degree of scrutiny.
Sureties, like insurance companies, aren’t in the business of losing money. Very rarely will a surety take a loss. Because of that, the bond premium is typically meant to cover pre-qualification services, namely the underwriting. To keep their exemplary track record in place, underwriters scour financial documents and other key information items when analyzing an application.
In general terms, premium costs for bonds might range from 1 to 4 percent. Applicants who fail to meet certain benchmarks may wind up in a high-risk market, where consumers can pay anywhere from 5 percent to 20 percent of the bond amount.
There’s no hard and fast rule that surety officials can point to and divine a total cost. Market conditions and an individual consumer’s financial conditions can change suddenly and without warning.
Check out SuretyBonds.com to get your free surety bond quote. Consumers can also find out what rate they’re eligible for (with no obligation) by filling out our automated bond form or by calling 1 (800) 308-4358 from 7 a.m. to 7 p.m. CST.