Warehouse Bond

Numerous states, such as New York, Massachusetts, Wisconsin, South Dakota, and Georgia, oblige warehouse operators to get licensed and bonded, so that they can operate legally.

If you are in the business of providing storage space for goods, check your state’s regulations. You might need to post a warehouse bond. Its goal is to safeguard the interests of your customers who are entrusting you with the storage of their property. The bond ensures you will handle goods properly and will abide by all applicable regulations.

Depending on the type of goods that you store, the licensing requirements can vary. Before you start your licensing process, make sure to check with your local authority about whether you need to post a bond and what its amount should be.

There is no nationwide bond amount for warehouse operators. The bond cost depends on this amount, thus it varies across different states. Additionally, the bond cost depends on the personal and business financials of the operator.

Every state sets different bond amount requirements, which are sometimes based on the number of warehouses operated, on the value of the goods stored, or are set case-by-case. For example, in Massachusetts, warehouse operators need to post a $10,000 surety bond for each location they are managing. In other states like Georgia, the bond amount is set individually.

Your bond premium– or the cost of the bond– is only a fraction of the bond amount you are required to post. If you qualify for the standard bonding market, you can expect bonding rates in the range of 1% to 4% of the bond amount. A simple calculation shows that for a $10,000 bond, you can pay as low as $100.

Besides the bond amount, there are other factors that affect your bond premium. When you apply for your bond, your surety provider will examine your personal credit score, business financials, professional experience, and assets and liquidity. On the basis of this information, your bond cost will be lower if you are seen as a low-risk applicant.

You can consult our surety bond cost page for a detailed overview of how your bond price is set.

It can be tough to get bonded with bad credit. Here at Lance Surety Bonds, we operate our Bad Credit Surety Bonds program to help warehouse owners with low credit scores, tax liens, bankruptcies, or civil judgements get bonded.

The typical bad credit bonding rates are in the range of 5% to 10%. The bonding costs are slightly higher, but you are still guaranteed to get the top rate with us. We work with a number of A-rated, T-listed surety companies, which allows us to shop around for the best bonding option for your case.

You can apply online for your free warehouse operator bond today! When you submit your complete paperwork, Lance Surety Bonds will deliver your exact bond quote in no time.

For further information on the bonding process, you can check out our How to Get Bonded page.

For any questions, our bonding experts are here to help. Just call us at (877) 514-5146 and we will be happy to assist you.

If you are getting bonded for the first time, it’s important to remember that your warehouse bond is not insurance for your business. Instead, it is protection for your customers against fraudulent or negligent actions on your side.

In case you do not fulfill your contractual obligations, you can face a claim on your bond. If proven, affected parties can receive a compensation up to the penal sum of the bond. At first your surety reimburses the claimant, but you are liable to repay it fully soon after.

Because they present a serious financial threat to your business, claims are certainly to be avoided. They also jeopardize your reputation and can make it difficult to get bonded in the future.