Municipal License and Permit Bonds
Many industries require a surety bond as part of the license or permit process for businesses. Bonds protect consumers from harm due to fraudulent or negligent business practices.
License and permit bonds are often regulated at the state level, such as auto dealer bonds and mortgage broker bonds. However, others are regulated at the local level and are only required in certain municipalities.
Keep scrolling to learn more about municipal bonds and why you might need one.
Why Do I Need a Local License Bond?
Some cities and counties require bonds for industries or projects that are not managed at the state or federal level. These bonds often guarantee payment of local taxes, fees and fines.
For example, several California counties require a subdivision tax bond to ensure payment for property taxes and local assessments during new subdivision construction.
Municipal authorities also use these bonds to gain closer oversight of specific industries. This makes it easier for local governments to enforce regulations.
For instance, in Missouri, there’s no statewide licensing requirement for contractors. However, certain counties and cities require a contractor license bond depending on your location and type of work. This allows local governments to oversee construction in the community.
Can I Use a State Bond for a Local License or Permit?
No, municipal bonds have separate bond forms, terms and regulating authorities.
Some industries may require both a local and state bond. For example, some contractors need a state contractor license bond in addition to a local city bond for pulling permits.
How Much Do Municipal Bonds Cost?
Many city- and county-level license and permit bonds are issued at the same price for all applicants. Premiums are often just $100–$150 for many local bonds.
However, some permit bonds are subject to underwriting and typically cost 1–3% of the total bond amount based on credit score.
What Industries Require Local License and Permit Bonds?
Some industries are more likely to be regulated locally if they involve hands-on work, local tax obligations, zoning requirements or have the potential to directly impact public safety.
Common industries with municipal bond requirements include the following:
- Construction contractors
- Solicitors and transient vendors
- Secondhand dealers and pawn shops
- Alcohol dealers
- Tow truck operators
- Subdivision developers
- Waste haulers and recycling services
- Short-term rental hosts (ex. Airbnb)
Many cities also have general business license bond requirements that may be required to operate a business within city limits.
How Do I Know If I Need a Municipal Surety Bond?
Your local licensing authority will typically tell you if you need a municipal surety bond as part of the license or permit application process. These bonds generally enforce local ordinances versus statewide rules.
Requirements vary greatly by location. Some cities and counties may require a bond to operate or solicit business within their limits, even if your place of business is elsewhere. Check with your local licensing authority to confirm any bond requirement.
How Do I Get a Local License and Permit Bond?
SuretyBonds.com provides the fastest and easiest way to get local license and permit bonds. Simply select your state below and click “Find My Bond.”
Once you find the bond you need, just follow these simple steps:
- Apply Online: Enter your information in our secure online portal
- Pay Invoice: Complete your purchase online or over the phone
- Receive Bond: Receive your bond via email or mail
Upon receipt, sign and file the bond documentation with your city or county authority.
If you need a bond for a location not listed, please call 1 (800) 308-4358 for assistance.
Want to Learn More?
Visit our Surety Bond Education Hub for more information on surety bonds. If you have any questions or concerns, call 1 (800) 308-4358 to talk to a surety expert today!
