How much does a surety bond cost?
There is no single price for a surety bond. You generally pay a premium to obtain one, and the cost depends on the bond you need and the surety’s review of your application. A quote for your specific requirement is the best way to find out what you will pay.
For background on the obligation a bond covers, see what a surety bond is.
Bond amount vs. premium
The bond amount is the stated limit of the surety’s obligation under the bond. The premium is the price you pay for the bond; it is usually less than the bond amount. For example, a requirement for a $10,000 bond does not necessarily mean you pay $10,000 to purchase it.
Some premiums are calculated as a percentage of the bond amount, while other pricing methods or minimum premiums may apply. See our guide to the cost of a $10,000 surety bond for an illustrative calculation.
What affects the cost?
Bond type, required amount and terms can all affect the quote. A license bond and a construction contract bond serve different purposes and may be priced differently. The surety may also review your credit, experience and finances, depending on the bond. For its guarantee program, the U.S. Small Business Administration says applicants must meet the surety’s credit, capacity and character requirements.
Requirements and pricing vary by surety and bond. Credit is not the only factor, so ask a bond provider about your particular situation.
Is the premium paid once?
It depends on the bond and its term. Some bonds need to be renewed, which can mean another premium. Ask how long the quote covers, whether renewal is required, and what fees or other charges apply. Renewal pricing may change.
Is the premium refundable?
The premium is the price for the bond, not a deposit of the bond amount. Whether any premium can be refunded depends on the agreement and applicable rules. If the surety pays a valid claim, you may have to reimburse it under your indemnity agreement. Read that agreement before signing.
How to get a useful quote
Have the requirement from the organization asking for the bond ready. It should identify the bond type, required amount, state and any required form. Ask for the total due, the term covered, any fees and the renewal and cancellation terms.
Ready to find out what your bond may cost? Start your bond quote inquiry → Share your bond requirement, location and required amount to get started.