Since this type of bond is considered low risk, the cost can range between 1% to 3% of the bond amount. In most cases, companies pay an average of $100 annually for a $5,000 bond, but it can vary. Factors that affect the cost of fidelity bonds include the bond amount, the number of employees handling sensitive information, the data managed, and the type of bond you need. In some cases, providing the surety company with your financial statements is a non-negotiable requirement. For example, freight broker bonds have rates of 1% to 15%, making them one of the most expensive surety bonds due to the mandated coverage amount.

Most Common $5,000 Surety Bonds

• If your bond requires underwriting, each individual with more than a 10% ownership stake in the entity will be reviewed.
• If the history of the applicant is trustworthy, it is seen as less of a risk to issue a bond.
• The exact percentage is dependent upon the surety’s assessment of the risk involved with the guarantee being provided.
• In some cases, the total bond prices are offered at a fixed place.
• Check out the Power Producers Podcast featuring ZipBonds CEO and Co-Founder Zach Mefferd to learn more.
• SuretyBonds.com approves 99% of applicants with our Bad Credit Surety Bonding Program.
• The surety company assures the owner, through the surety bond, that the contractor will perform the contract.

Types of contract bonds include bid bonds, performance bonds, and payment bonds. Next, we’ll explore the specific costs of different types of surety bonds. Yes, getting a surety bond with bad credit is possible, but the premium may be higher. Some surety companies specialize in working with applicants with poor credit and may be able to offer lower rates than others. Your credit score offers a clear and concise overview of your financial history, including your assets, bill payment history and debt-to-income ratio. Some bonds are also priced directly based on the bracket in which your credit score falls.

Wrapping up: Shopping around for the best surety bond rates

If your bond requires underwriting, each individual with more than a 10% ownership stake in the entity will be reviewed. A credit report often suffices, but your underwriter might also look at additional factors like work history, industry experience and financial statements. Higher-risk bonds, such as auto dealer, contractor and mortgage professional bonds, receive more claims and are likely to be underwritten. The more bonded projects you complete successfully and on time will give surety bond producers and underwriters the confidence in bonding you. Prices for most bond types are fixed at the low end of this range for everyone and available for immediate purchase.

Popular Bonds & States

Simply pay for your premium through our secure online checkout or over the phone. Then, we’ll deliver your official bond documentation with an unparalleled turnaround time. The premium is earned by the surety company, whether or not there is any future payout against the bond. Surety agencies are unable to prorate premium refunds even if a business closes before the bond term is complete. You can apply for a bond now and receive a quote within one business day — or instantly for certain bonds.

How to Get a $5,000 Surety Bond with Bad Credit

Licensees must file this bond to protect clients and their sensitive financial information. Therefore, living in one area may impact your surety rate and differs from state to state. Fidelity bonds offer businesses and their customers protection from fraudulent employees, specifically when they have access to their personal information or assets. Next, let’s dive into some frequently asked questions about bond insurance costs. They provide financial protection in cases like appeals, guardianships, and estate management. Highly qualified applicants with strong credit might pay just $25 to $50, while an individual with poor credit will receive a higher rate.

• However, if you have the finances to back the bond claim, you should have no problem securing a surety bond.
• They can provide you with a quote based on your specific needs.
• Bonds required by state and federal governments will also be more costly since it’s mandatory to have higher bond amounts.
• At ZipBonds, we’re seeing more private work being bonded, versus only public work.
• To get the lowest pricing for your surety bond, ensure your credit score, personal financials and business financials are in good shape.
• Several factors can impact the price of a surety bond, including the bond amount, the type of bond, the applicant’s credit score, and the applicant’s financial history.
• Next, we’ll explore the specific costs of different types of surety bonds.

It will also help to have someone who knows how to work with an underwriter, with your best interest at heart. Underwriters will look at various business documents, such as balance sheets and work-in-progress forms, to evaluate whether or not the company can afford the bond. All Notary Bonds from Surety Bonds Direct are available at fixed prices. Understanding how these costs work can seem overwhelming, but don’t worry—we’re here to break it down for you. Here are some examples of how much different bond amounts can cost to purchase. If you need a $50,000 bond, it will likely cost more than a $5,000 bond, for example.

Certain bonds are inherently risky, so you can anticipate paying more. By understanding these aspects, you can better manage your bond insurance costs and ensure you’re getting the best deal possible. When a bond issuer purchases bond insurance, it guarantees the repayment of the bond’s principal and interest if the issuer defaults. This insurance enhances the bond’s credit rating, making it more attractive to investors. For example, municipal bonds often come with bond insurance to reassure investors about their safety.

For instance, construction bonds are often more expensive because the construction industry is prone to delays, disputes, and financial instability. For example, if a contractor (the principal) is hired to build a school but fails to complete the project, the school how much does a 5000 surety bond cost district (the obligee) can make a claim on the bond. The surety will compensate the school district, ensuring the project can be completed or losses are covered. Generally, you can expect your surety bond to cost between 0.5% and 10% of the total bond amount. This means a $10,000 bond could cost anywhere from $50 to $1,000. As mentioned above, your bond rate is a percentage of the bond amount.