Virginia

Required Surety Bonds In Virginia

There are three categories of surety bonds commonly required in Virginia: license and permit bonds, contractor bonds, and court bonds.

Virginia License and Permit Bonds

License and permit bonds are required by some state agencies and local governments. Such bonds protect those entities and consumers against financial loss due to the actions of licensed companies and individuals operating in violation of applicable rules and regulations. The following are among the government entities that require license or permit bonds in Virginia:

• The Department of Motor Vehicles, which licenses driver training schools, motor vehicle dealers, and passenger carriers/brokers
• The Department of Agriculture and Consumer Affairs, which licenses professional solicitors, travel clubs, health clubs, health spas, extended service providers, and credit service businesses
• Board for Contactors, which licenses contractors and individual tradesmen (electrical, plumbing, HVAC, gas fitting, water well construction, elevator mechanics, backflow prevention, and building energy analysis)

A number of cities and counties require licensing and bonding of businesses such as precious metal and gem dealers, pawnbrokers, food truck vendors, and contractors.

Contractor Bonds In Virginia

In addition to license and permit bonds, contractors may be required to obtain other types of surety bonds, such as bid bonds, performance bonds, and payment bonds in order to be awarded or work on public works projects. Contractor bonds provide protection against a contractor’s malfeasance, nonperformance, or failure to pay labor and suppliers in accordance with contract terms.

Virginia Court Bonds

Courts at any level may require a surety bond to ensure payment of damages, court costs, and/or legal fees in the event of an unsuccessful appeal of a decision. Court bonds may also be required from estate executors, guardians or conservators, and others serving in a fiduciary capacity to guarantee that they will fulfill their duties in accordance with the law and the rules of the court.

How Much Will a Surety Bond Cost Me in Virginia?

The surety company determines the cost of a bond by multiplying the bond amount by the premium rate. The bond amount is established by the entity requiring the bond, and the premium rate is based largely on the applicant’s credit history. Bad credit won’t necessarily keep you from getting a bond, but you’ll pay a higher premium rate, and thus a higher premium.

What Happens When a Claim is Filed?

The surety company will pay any claim against your bond that is determined to be valid and will then seek repayment from you. Knowing that, look for a surety bond company that will help you defend yourself against invalid claims.

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