What is a Minnesota surety bond?
Under certain circumstances, as a business owner or individual, you might need to post a Minnesota surety bond. So what does this mean?
A surety bond represents a three-party agreement between:
- A principal: the side who has to obtain the bond
- An obligee: the side who mandates the bond
- A bonding company: the side who backs the agreement
The purpose of most surety bonds is to protect the interest of the public and/or a certain business’ clients. Failure to comply with the bond terms can result in a claim against the principal of the surety bond.
Lance Surety Bonds can help you get any type of Minnesota surety bond you need, even if you have bad credit. If you already know which bond you need, you can easily locate it in the table below and click on the Apply Now button.
For more information you can call us at (877) 514-5146 or have a look at the Q&A section below.
Questions about Surety Bonds in Minnesota
How much does a Minnesota surety bond cost?
There’s an easy way to get an approximation of your bonding costs. First, you need to know exactly which surety bond you need to obtain. Each surety bond has a different total bond amount determined by the obligee. The total bond amount isn’t your cost, but the sum up to which a claimant can be compensated when a claim is proven.
Surety bonds resemble insurance in that they are also paid in premiums, usually annually or biannually. Premiums are a small percentage of the bond amount, set by the bonding company which issues your bond. Surety bond companies have different underwriting criteria, but they all consider the applicant’s credit score most important.
Applicants with a high credit score typically pay premiums no higher than 3%.
Can I get a Minnesota surety bond if I have bad credit?
Some surety underwriters can be hesitant when underwriting bad credit surety bonds due to the higher risk involved. For this reason, Lance Surety Bonds has created its bad credit program, which enables us to get 99% of our applicants bonded.
We only work with A-rated and T-listed bonding companies, which means that your Minnesota surety bond will always be issued by the strongest providers. This is important because some obligees may be unwilling to accept surety bonds underwritten by less reliable sureties. Our partnerships ensure you’re getting the same strong backing, and the same guarantee that your bond will be accepted, no matter your credit score.
Bad credit surety bond premiums are a bit higher than the standard market rate. They usually vary between 5% and 15% of the total bond amount. Our agents can give you some tips on how to reduce your premium despite your bad credit.
Our What Does a Surety Bond Cost? page also contains some valuable tips on the topic.
How do I get bonded in Minnesota?
Lance Surety Bonds has made it easy for you to apply for and get the bond you need. Our online application is 100% secure and takes just a few minutes to complete.
For most types of Minnesota surety bonds, we can tell you instantly whether you are approved, and even give you a free bond quote. After we receive payment, processing should take no longer than 1-2 days, after which we will send you the original bond form by mail.
If you have any questions or experience difficulties with your applications, our surety bond experts can help– simply call us at (877) 514-5146.
Types of Minnesota Surety Bonds
Not all surety bonds serve the same purpose, so it’s important to learn about each category of surety bonds. There are three main categories of surety bonds in Minnesota:
- License bonds are required from businesses who are applying to obtain a license or a permit from their state. The bond is meant to ensure that these businesses are compliant with applicable rules and regulations, and that their clients are protected against unethical business practices. Failure to comply with the terms of the license bond can result in a claim against your business.
- Construction bonds comprise several types of surety bonds which are usually mandated for work on public projects, and less frequently, on private ones as well. They protect taxpayer money and the project owner’s investment, by making sure there’s an extra layer of protection in case of contractor default or contract breach.
- Court bonds are types of surety bonds that a Minnesota court can require of you. You may need a court bond when you appeal a court judgment in front of a higher instance. If you are responsible for another person’s property or assets, you may also need a court bond, which will guarantee that you represent that person in their best interest.
Lance Surety Bonds has expertise in underwriting all three categories of bonds, so you can count on us regardless of which surety bond you have been required to post.