Surety Bond FAQs
Q: How much does it cost to get a surety bond with Global Bonds?
A: The cost of your surety bond will vary depending on the type of bond and the amount of bond coverage you need. Surety bond premiums usually range from 1-11% of the total bond amount. For example, if you get quoted a 2% rate on a $50,000 bond, you will pay $1,000 for your surety bond.
At GlobalBonds.company, our surety specialists work with many markets, they’ll be able to access the most competitive rates available for any applicant. Submit a request online.
Q: What is a surety bond?
A: A surety bond is a three-party agreement. The obligee requires the principal to buy the bond and honor its terms. The surety company financially backs the bond if the principal violates those terms. If the surety company pays out any claims made on the bond, the principal must reimburse the surety.
Q: Who is a surety?
A: A surety refers to the surety company that issues the bond. Bonds are often required when a business applies for a license. Bonds are a form of financial security, and the surety is the entity that backs the bond.
Q: Where do I get a surety bond?
A: You can get a surety bond from GlobalBonds.company if you are approved and reffered to do so on our shop cart. Our quotes are pre-approved by principals and guarantees for shop cart items are prearranged with due diligent. When you contact our company, you should know the kind of bond you need, the amount and referral; if not, refer to your principal. Dealers are also a good source for your surety options. Being prepared speeds up the bonding process.
GlobalBonds.company issue exclusive bonds all over the world. If you are a principal, submit a request for a quote and our surety specialists will walk you through the bonding process.
Q: What is a letter of surety?
A: A letter of surety is often confused with a letter of credit. A letter of credit is issued by a bank. It assures a seller they will receive payment for goods or services from a buyer. If payment is not received, the buyer can request payment from the bank. Like surety bonds, letters of credit are forms of financial guarantees.
Q: Can’t I just buy an insurance policy?
A: No. Bonds and insurance are two completely separate means of financial protection. Insurance is basically a risk-transfer tool between two parties where individuals exposed to similar risks contribute premiums into a pool. Surety bonds act as three-party risk-mitigation contracts where financial loss is not expected.
Surety bond premiums typically only cover the costs of qualifying services and underwriting processes. Unlike insurance policies–which act as a retroactive protection–bonds work like a type of credit where the principal is on the hook for claim payments in the event of default. Thus bonds encourage professionals to act appropriately in order to avoid claims.
Q: Do surety bond costs vary for different countries and states?
A: Yes, surety bond premiums vary by jurisdictions and projects since different governments and principals have set their own rules and negotiated regulations for certain bond types. The needed bond amount directly affects premiums charged by Global Bonds because they calculate base fees as a percentage of this amount.
Q: How can I get the bond I need for the best value?
A: Buying a surety bond is like making any other important financial decision—the best way to get what you need for a good price is to consider all of your options.
Once you find a reliable surety provider who offers you great service for a competitive price, you will probably want to work with them when purchasing future bonds since they will already have your financial history on record. Sticking with a reliable surety provider can decrease the amount of stress and uncertainty the bonding process can produce in the future.
Q: Does it cost to apply for a bond?
A: No, the simple act of applying for a surety bond does not cost you any money. Although applicants do pay a premium to get the bond, the application process itself is complimentary.
In fact, you can learn how much your bond will cost in a few business days—oftentimes the same day. Additionally, the experts at GlobalBonds.company are available to answer your bond-related questions (you must be a principal).
Q: When do I have to pay for my surety bond?
A: Surety providers almost always require full upfront payment to be made before they will issue the bond to a principal (unless prearranged).
Q. Why can’t I get my bond approved?
A. Global Bonds is an exclusive Bonding Company. Most applicants for bonds are declined due to strict qualifications for our guarantees.
Q. What hurts bond qualification?
A. Strict Underwriting rules, lack of assets, previous bond claims. Unwillingness or inability to comply with strict requirements to issue a guarantee (examples: LoC, cash collateral, personal Promissory etc.)
LoC – is a letter issue by your bank
Cash collateral – is a requirement imposed by us; whether, actual or procedure.
Personal requirements - Variations
Q. Why can't anyone just purchase a shop cart item and be covered for anything?
A. Our shop cart items are pre-approved for specific clients who exclusively refer their people to individual products.