What is a Washington surety bond?
Surety bonds can sometimes be a confusing requirement for those encountering it for the first time. A bond is most often required from business owners who are taking steps to obtain or renew their business license, although several other occasions also warrant a surety bond.
Surety bonds are a three-party agreement required from a principal by an obligee, and backed by a bonding company. When underwriting the surety bond, the bonding company guarantees to the obligee that the principal will fulfill all contractual obligations or pay compensations.
Lance Surety Bonds is licensed to offer all types of Washington surety bonds. We do so at the lowest rates and even for applicants with bad credit.
If you want to continue learning, give our “What is a Surety Bond?” page a try, or consult the Q&A section below.
Frequently Asked Questions
Who needs a surety bond in Washington?
The state of Washington requires different professionals or individuals to get bonded.
Business who wish to get a license or a permit to legally operate in Washington will need a type of license bond, to guarantee compliance with state laws and the protection of their clients’ interests.
Construction contractors working on large projects (especially public ones) will often need a contract bond to make sure they complete the project as per the contract.
Individuals can be required to post a court bond by a state court if they are appointed fiduciaries, guardians or in cases they want to appeal a court decision.
How much does a Washington surety bond cost?
The cost of surety bonds depends on several factors. Every surety bond will have a different bond amount required. The total bond amount is nothing more than the maximum penal sum of the bond. In other words, a claimant can get reimbursement up to that amount.
Principals are not required to pay that amount upfront. Instead, they pay bond premiums, annually or biannually in most cases. While the total bond amounts are determined by a state government or agency, the bond premium is set by the surety. Sureties evaluate your application before they give you a bond quote, but they are mostly interested in your credit score.
Applicants with good credit pay the standard market rate of between 1% and 4% per year.
However important, your personal credit score is not the only determinant of your premium. Find out more information on our What Does a Surety Bond Cost? Page.
Can I get a surety bond in Washington if I have bad credit?
Credit score is very important when obtaining your surety bond, because a low score signals a higher risk for the surety. Not all sureties underwrite bad credit surety bonds.
This is why we created our bad credit surety bonds program, thanks to which we help 99% of applicants get bonded. Premiums for bad credit applicants are slightly higher (between 5% and 15%), but if you take step to improve your credit report, you can pay a lower price when it’s time to renew.
How does the application process work?
Our online application is incredibly simple. All you have to do is fill it out and we will contact you with a free bond quote. We will let you know what we need to complete your application and make sure to process it in as little time as possible.
As soon as it’s signed by the bonding company, the original bond form will be on its way to you by mail. We can also provide copies via fax or email.
Most Popular Surety Bonds in Washington
A $30,000 surety bond is required for a variety of licenses, including new, used, and wholesale dealers. The bond protects car shoppers from unethical or fraudulent business practices.
If you collect debts on behalf of others, you need this surety bond to get licensed as a collection agent. The purpose of the bond is to make sure all funds you collect will be transferred to your clients as promised.
This is a requirement from investment advisers to make sure they do not defraud clients by intentionally providing financial advice which is not in their best interest.
Travel agents in Washington State need to be licensed and bonded. The surety bond is there to guarantee that collected fees are transferred in accordance with state laws and towards the appropriate entities.
Also known as a continuous contractor’s surety bond, it’s required from all contractors who wish to hold a license in Washington. It ensures compliance with state regulations and protects the contractor’s clients.
If you raise funds on behalf of others, you will have to post this surety bond. It ensures the proper management of collected funds.