FOR ALL YOUR SURETY BOND NEEDS.
These surety bonds are general for all states.
Learn more about corporate surety bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
Corporate surety bonds are surety bonds that are issued to companies rather than to individuals. Though surety bonds are most often spoken of in the context of personal bonds, many companies need to buy them as well. Just about any kind of bond that can be purchased by an individual can also be underwritten for a corporate entity.
Many of the commercial bonds issued to corporations are license and permit bonds that are required in order to obtain a new business license or renew an expiring one. Many others are contractor bonds used in the construction industry.
Surety bonds are required in order to become licensed in many different types of businesses, depending on the state. The specific government agencies with licensing authority vary from state to state, and a type of business that requires a license in one state may not require one in another.
In many states, licensing and bonding are required for businesses that carry a potential tax liability to the state or have the potential for financial harm to the state or to consumers. Auto dealers, beauty enhancement services and health clubs, businesses that transmit money or make and service loans, and contracting businesses are a few of the many types of companies that may need to purchase corporate surety bonds.
Additionally, the federal Miller Act requires contractors to purchase surety bonds in order to bid or work on public works projects valued at more than $100,000. Many states have their own “Little Miller Act” that applies to state-funded projects of even lesser value.
Corporate surety bonds serve a regulatory purpose in the industries in which they are commonly used. Each bond spells out the specific laws and rules that the business must abide by to be considered in compliance with industry regulation.
The government entity requiring surety bonding is the obligee in the surety bond agreement. The business required to purchase a corporate bond is the principal. And the underwriter that issues the bond is the surety. The bond is the principal’s guarantee to conduct business in a lawful and ethical manner and protect the obligee and consumers from financial harm stemming from the principal’s actions.
The surety will investigate any claim filed against a corporate surety bond to ensure that it is valid before making payment to the claimant. The principal is then legally responsible for repaying the surety.
Two main cost factors determine the pricing of corporate surety bonds: the required amount of the bond and the premium rate assigned to the given applicant. The obligee establishes the bond amount, which depends on the reason for the bond and the penalties assessed for regulatory infractions, which vary from state to state. The surety decides what percentage of that bond amount the applicant must pay as the bond premium, which is generally based on the company’s financial statements and other information.
Whatever your corporate bond needs may be, our experienced surety professionals are more than capable of meeting them.
