Your guide to
Surety Bonds in Texas
A license, permit or contract may require a surety bond before you can start work. Our agency helps you understand what a bond is, how it works and how it differs from insurance for your business.
What it covers
Common types of surety bonds
A surety bond involves three parties: you as the principal, the party requiring the bond, and the surety company that backs your promise. The type you need depends on what is being required.
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License and permit bonds
Often required by a government agency for certain licenses or permits, backing your promise to follow the applicable rules.
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Bid bonds
Back your promise that, if your bid is accepted, you will sign the contract and provide any required performance and payment bonds.
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Performance bonds
Back your promise to complete a project according to the terms of the contract.
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Payment bonds
Back your promise to pay subcontractors, laborers and suppliers on a project.
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Court and fiduciary bonds
May be required in some legal matters, such as for a person appointed to manage an estate or another person's affairs.
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Notary bonds
Texas notaries public are generally required to have a bond, which protects the public from certain notary errors or misconduct.
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Why it matters
A bond is not insurance for your business
Insurance generally protects you or your business from covered losses. A surety bond works differently: it protects the party that required it if you do not meet your obligation, and the surety generally expects you to repay any claim it pays.
Surety companies usually review the business and its owners before issuing a bond, and depending on the bond they may look at credit, finances and work history. We can help you understand what a bond requires and what to expect.
Before you apply, get the exact bond wording or requirements from the agency or project owner asking for it.
Before you apply
Details a surety may ask for
- The bond type and amount required
- Who is requiring the bond
- Your business name and structure
- Owner information
- Contract details, for contract bonds
- Financial information, for larger bonds
Who often needs bonds
- Contractors and the trades
- Bidders on public projects
- Auto dealers
- Notaries public
- Estate administrators
Answers
Surety bond questions
Straight answers to common questions. If yours is not here, call or text our agency.
No. A bond protects the party that required it if you do not meet your obligation, and you are generally expected to repay the surety for claims it pays. Insurance is designed to protect you from covered losses.
The agency, court or project owner requiring the bond usually specifies the type and terms. Share those requirements with us so the details can be reviewed.
It generally depends on the bond type, the amount required and the surety's review of your business, which may include credit and financial information.
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Tell us what you need
Your name, a number that reaches you, an email, and a few quick questions about the coverage you pick. Our team reviews it and calls you back.
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Next step
Let’s review your needs to find the coverage that fits you.
Request a quote online, or call or text our agency. If your current policy already fits, we will tell you that too.