Surety Bonds, license, contract, and permit bonds.

Frequently Asked Questions

• What is the difference between a surety bond and insurance?
  A surety bond guarantees the principal's performance or compliance to the obligee, with the surety covering losses if the principal defaults. Insurance protects the policyholder from loss. In a bond, the principal must reimburse the surety for any claims paid.
• Who needs a surety bond in Florida?
  Contractors, auto dealers, businesses requiring licenses or permits, and parties involved in court proceedings often need surety bonds to meet regulatory or contractual requirements.
• How much does a surety bond cost?
  Costs vary based on bond type, amount, credit score, and business history. Premiums typically range from 1% to 15% of the bond amount, depending on risk factors.
• What is the $25,000 auto dealer bond in Florida?
  Florida law requires motor vehicle dealers to obtain a $25,000 surety bond to protect consumers and the state from dealer misconduct or regulatory violations (Florida Statutes § 320.27).
• Can a surety bond be canceled?
  Yes, surety bonds can be canceled by the surety or principal with proper notice. Cancellation terms depend on the bond agreement and obligee approval. Many bonds remain in force until formally released by the obligee.
• What happens if a claim is made on my surety bond?
  If a claim is valid, the surety pays the obligee up to the bond amount and seeks reimbursement from the principal under the indemnity agreement. The principal remains liable for all losses.
• Are surety bonds required for all contractors in Florida?
  Most contractors must obtain license bonds as part of state licensing, but requirements vary by license classification and project type. See Florida Statutes Chapter 489 for details.
• How do credit scores affect surety bond premiums?
  Surety companies use credit scores as a key underwriting factor. Higher credit scores generally lead to lower premiums because they indicate lower risk. FICO is the single biggest input on smaller bonds.
• Can I get a surety bond if I have poor credit?
  It is possible but may require higher premiums or collateral. Working with an experienced agent — and specialty markets including SBA Surety Bond Guarantee programs — can help find options suited to your situation.
• How fast can I get a license bond?
  Most small license bonds (under $25K) issue same-day on acceptable personal credit. Larger contract bonds require more underwriting on financials, work-in-progress, and history.