Texas Service Contract Provider Bond Guide
In Texas, service contract providers must file a surety bond to register with the Department of Licensing and Regulation.
Bond Overview
- Purpose: To ensure service contract providers uphold state regulations and client contracts
- Who Needs It: Businesses offering extended service contracts in Texas
- Regulating Body: The Department of Licensing and Regulation
- Required Coverage: $25,000–$75,000
- Premium Rate: 1–5% based on credit score
Learn all about the bond requirements and process in this guide.
What Is a Texas Service Contract Provider Bond?
This bond ensures that service contract providers in Texas comply with state standards and have the financial capacity to fulfill contracts.
The Texas Department of Licensing and Regulation requires this type of commercial surety bond to register with the state.
How Much Do Service Contract Provider Bonds Cost in Texas?
Texas service contract provider bonds cost a small percentage of the bond amount, typically 1–5%.
Exact rates vary based on personal credit score. Apply for your free quote now!
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
Who Needs a Service Contract Provider Bond?
In Texas, you must register with the state before providing contracts for additional maintenance on homes, motor vehicles or consumer goods.
Your bond amount will be 5% of your total contract revenue minus claims paid, with a minimum of $25,000.
Alternatively, you can submit a reimbursement insurance policy, cash deposit or letter of credit. However, a surety bond is typically the most affordable option.
How Do I Get My Bond?
SuretyBonds.com provides the fastest and easiest way to get a Texas service contract provider bond. Just follow these quick steps:
- Apply: Submit an online quote request form
- Quote: Receive your quote within one day
- Sign: Complete the indemnity agreement
- Buy: Purchase the bond online 24/7
We’ll mail you the bond via your preferred shipping method. Be sure to file the bond with the Department of Licensing and Regulation as instructed.
If you have any questions, call our friendly surety experts at 1 (800) 308-4358 for assistance.
How Does a Texas Service Contract Provider Bond Work?
As with all surety bonds, a service contract provider bond creates a legal contract between three parties:
- Principal: You, the service contract provider filing the bond
- Obligee: The Texas Department of Licensing and Regulation requiring the bond
- Surety: The provider issuing the bond
This holds you financially responsible for upholding the provisions of the Texas Occupations Code Chapter 1304.
If you break the bond terms, harmed parties can file claims. The surety will pay valid claims up to the bond amount, but you are ultimately responsible for refunding the surety.
How Do I Renew My Bond?
These bonds expire annually. To renew your service contract provider bond, simply pay your renewal invoice when prompted.
We’ll begin contacting you by phone and email 90 days before the expiration date.
