License & Permit Bonds

Protect Against Risk

License and permit bonds are often required by municipalities to help protect the public. They work by guaranteeing that businesses adhere to all government regulations. License and permit bonds offer solid protection via compensation to affected parties who are harmed as a result of a professional’s negligence, fraud, incompetence, or poor workmanship. Since every industry has different regulations, this type of surety bond is sector-specific, and is often mandatory to operate a business. For example, Motor Vehicle Dealers need to carry a bond to ensure that a buyer can secure a clear title to the vehicle of their choice while also protecting against other legal and ethical issues. License and permit bonds are not commercial insurance and are separate from other types of surety bonds.

Bonds are required as a condition of receiving a license or permit to engage in business. So license and permit bonds ensure that contractors and business owners can legally operate in their state by validating that they meet certain requirements, like a minimum age and experience level. Meeting these prerequisites means that the individual is more likely to do business responsibly. Bonds also ensure that if something goes wrong, the affected party has recourse. Since they are a legal requirement in many municipalities, holding a license and permit bond also protects business owners from facing fines or even prison time.

A business benefits from a license and permit bond because it functions as an added layer of protection that could be a selling point for potential customers. Besides attracting new customers and offering a competitive edge, being bonded can also help a small business owner to win contracts and take on bigger projects. Bonds underscore reliability and because credit history factors into whether a bond is issued, the fact that a business has one also speaks to its good management and dependability.

Just as requirements vary, costs can vary too. Several factors will come into play when we determine a bond premium. Some of these might include years in business, industry experience, financial health, type of bond, level of risk, and length of the bond’s term. The total amount available as protection to a claimant will also affect price, and this amount can vary from place to place or by individual. Most often a business owner will pay a yearly premium that can be as low as 1% or up to 10% of the total bond amount. For example, a $20,000 surety bond with a premium rate of 5% would cost only $1,000. If a claim is made against that bond however, the bond holder could be responsible for the full sum. If an underwriter is not needed, and bonds are instant-issue–like they are at BK Insurance & Financial Services, Inc.–then the rate is generally lower.

Get a Surety Bond in Minutes

• Choose from the widest selection of instant issue bonds
• Apply online now and be approved in minutes
• Available in all 50 states, from Alabama to Wyoming
• Need help? Speak with a live person in chat

Submit some basic information and just moments later you could have a bond approval–evaluation, qualification, and underwriting are all handled quickly and conveniently. Our rapid approval service is available in all 50 states for a wide variety of surety bonds. No matter where you do business–from Ohio or Indiana to California or Oregon–we can help. Use our easy search feature to sort available bonds by state or keyword, then select the specific bond that’s best for your business. If you’re having any trouble finding what you need, feel free to ask questions to our live team that’s ready to chat. These skilled surety bond experts can help you to meet all applicable requirements and get you back to handling your business.

Propeller Bonds - is our partner who works directly with our customers to write License and Permit bonds.