Texas Professional Employer Organization Bond Overview
- Purpose: To provide financial security and operational certainty for PEO clients
- Who Needs It: All licensed professional employer organizations in Texas
- Regulating Body: The Texas Department of Licensing and Regulation
- Bond Amount: $50,000–$400,000
- Minimum Price: $500 or 1% of the bond amount
What Is a Texas Professional Employer Organization Bond?
A Texas professional employer organization (PEO) bond holds PEOs financially liable for following state rules and regulations.
PEOs provide third-party human resources services and are “coemployers” of their contracted clients’ employees. This bond offers financial security if a PEO breaks contract terms or licensing laws.
What Is the Bond Coverage Requirement?
The required bond amount depends on the number of covered employees a Texas PEO employs. Covered employees are defined as individuals who have a co-employment relationship with a client and a PEO.
| Bond Amount | Number of Covered Employees |
|---|---|
| $50,000 | Up to 250 employees |
| $75,000 | 251–750 employees |
| $100k–$400k | 751 or more employees |
How Much Do Texas PEO Bonds Cost?
Texas PEO bonds start at $500 or 1% of the required coverage amount. Rates may vary between 1% and 10% based on a soft credit preview. For example, a qualified applicant could pay just $1,000 for $100,000 coverage.
Factors like personal credit score, personal financials, and business financials may impact your rate. Request a free quote now.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Texas PEO Bond Work?
A professional employer organization surety bond creates a legally-binding contract between three parties.
| Bond Party | Description |
|---|---|
| 1) Principal | The bonded PEO owner(s) |
| 2) Obligee | The Texas Department of Licensing and Regulation |
| 3) Surety | The issuing surety provider |
As the bonded principal, you pledge to comply with Chapter 91 of the Texas Labor Code and licensing rules and regulations. If you violate these terms, the bond protects any party who is injured as a result. You must reimburse the surety for any damages paid out.
How Do I Get a PEO Bond?
With SuretyBonds.com you can get your PEO bond quote as soon as today. Submit a quick quote request, then complete the purchase online at your convenience.
You can select overnight, two-day or three-day shipping at checkout. Remember to file the original, signed bond form with the Department of Licensing and Regulation.
How Do I Renew My PEO Bond?
Your Texas surety bond will expire every 1–3 years, depending on the term you select. We’ll send out helpful reminders throughout the renewal period.
Pay the renewal premium to extend your coverage for another term. You need to maintain an active bond as long as you hold a PEO license.
How to Get a PEO License in Texas
To apply for a full Texas professional employer organization license, gather the following materials:
- PEO License Application Form - PEO-LIC-001
- Certificate of Insurance for workers’ compensation (if sponsoring workers’ comp)
- PEO Personal Information Form - PEO-LIC-003 for each controlling person
- Fingerprint submissions for all controlling persons
- Audited financial statements
- Corporate Information Form - PEO-LIC-005 (if applicable)
- Payment for licensing fees
- Any other required attachments
Find more details for limited license applications on the DLR website.
