What is a Home Inspector Bond & Why Do You Need One?

In a handful of states, you must obtain a home inspector bond before the state agency responsible for regulating home inspectors will issue you a license. Obtaining a surety bond is just one of many steps you must complete before you’re permitted to legally inspect home – but it’s an important step nonetheless, and there could be serious consequences if you don’t treat the bond requirement seriously. In this blog, we will answer the questions, what is a home inspector bond and why do you need one?

What is a Home Inspector Bond?

A home inspector bond is a mechanism that states use to help regulate the home inspection industry. When a home inspector enters into a bond agreement, he or she agrees to take financial responsibility for any damages caused to a client (someone in need of home inspection services) because of unlawful or unethical behavior. If a client believes a home inspector hasn’t “followed the rules,” the client may file a claim against the home inspector bond seeking financial compensation. The surety company that issues the bond to the home inspector and backs the bond will then launch a thorough investigation. Provided that everything outlined in the claim proves to be true, the surety will pay the claim in full. Lastly, the surety will collect the amount of the claim plus interest and fees from the home inspector – the party that triggered the claim and the party that has the financial responsibility for the claim under the terms of the bond agreement. In the simplest terms possible, a home inspector bond is a way to protect home owners/buyers/agents and hold disreputable professionals responsible for their behavior. 

Who Needs a Home Inspector Bond?

At the time of writing, most states do not require a home inspector bond. That doesn’t mean home inspectors in those states don’t need a license, and in some cases they may need different types of surety bonds as well. However, only a limited number of states require a home inspector surety bond specifically. Those states include: Alabama, Arizona, Arkansas, Kansas, Kentucky, New Mexico, North Carolina, Ohio, Oregon, and Washington. If you’re unsure whether or not you need a home inspector bond, reach out to Viking Bond Service – a nationwide surety brokerage with a team of bond experts who can help you determine exactly what kinds of bond(s) you need and help you through the application and approval process. Rely on us to get it right so that your ambitions of becoming a home inspector don’t encounter unnecessary delays. 

When Do You Need a Home Inspector Bond?

In states where a surety bond requirement exists, the state will not grant you a home inspector license until you can prove you have an active bond in whatever amount the regulators require. You must continue to keep that bond active for as long as you work as a licensed home inspector. If the state discovers you don’t have a bond, it will revoke your license, making it impossible to inspect homes legally. Keeping a bond active throughout your career involves renewing the bond regularly – typically every 12 months or after however long the bond agreement specifies. During renewal, the surety company will reevaluate your credit and quote you an updated bond premium price based on any changes to your credit in the preceding months. Consequently, the premium price could go up or down (or stay the same) each time you renew. 

Why Do You Need a Home Inspector Bond?

Home inspections are a sensitive and important part of the real estate industry. People rely on home inspectors to give them an honest assessment of a property, and what a home inspector reveals (or doesn’t reveal) has serious consequences for all involved. States encourage home inspectors to provide upstanding services by requiring them to get a bond that will hold them responsible for trying to manipulate or exploit a client. In that way, bonds discourage negative behaviors, giving clients an added layer of confidence. Home inspector bonds also provide a way to hold unlawful inspectors accountable and ensure anyone wronged by their behavior has a way to seek justice in the form of financial compensation. 

How Do You Acquire a Home Inspector Surety Bond?

It’s a relatively simple process. You will need to complete a standard bond application – with information about your background, business, and financial standing – submit to a credit check, and turn over any additional documentation the surety company asks for. You will then get a quote for the bond price (ideally within 24 hours). How much you pay depends, primarily, on your credit score and financial history. People with bad credit will likely pay more, but not drastically more – and with the right surety bond provider, they won’t be denied for a bond. Pay the premium to activate the bond, after which the surety will provide documentation to prove to the state you have the required bond. 

Viking Bond Service – Home Inspector Bonds in All States

If you need a home inspector surety bond, we have everything you need. Get answers to your questions and more information about anything by calling us at 1-888-278-7389 or by using the contact form on this page. Or get the bonding process started today – take a few minutes to complete this online application and expect to get a quote back fast!

5 Reasons You Need a Mortgage Broker Bond

Before we dive into all the different reasons you may need a mortgage broker bond, let’s explain the definition. A mortgage broker bond is a specific type of license surety bond. This and all other types of surety bonds hold the bonded party (in this case the mortgage broker) financially responsible if he or she violates state laws governing the mortgage industry – eg. if a broker approves someone for a loan well beyond his means to repay. 

If and when a broker violates state law, the person who was seeking a home loan may file a claim against the mortgage broker bond seeking damages in the form of financial compensation. As long as the claim describing the damages holds up as true under investigation, the surety company that issues and backs the bond automatically settles the claim in full. At that point, the surety will use whatever legal means necessary to collect the amount of the settlement (plus interest and fees) from the mortgage broker – the person with financial responsibility for all claims under the terms of the bond agreement. 

Mortgage Broker Bonds: 5 Reasons you need them

Now that you understand the basics of how mortgage broker surety bonds work, explore all the different reasons you must obtain one if you plan to work as a mortgage broker:

  1. State Laws – All 50 states require someone to have an active mortgage broker bond before they’re allowed to broker for home loans and at all points afterwards. There is no leeway around this requirement; bonds are mandatory for all mortgage brokers in all states. Every state requires this surety bond because it’s an effective way to regulate a sensitive industry and hold parties accountable when they disregard the law. 
  2. Licensure Requirements – When you apply for a license to become a mortgage broker (required in all 50 states), you must submit documentation proving you have an active mortgage broker bond that meets the state’s requirements. The state will not approve you for a license without a bond, and they can revoke your license if they discover your bond has lapsed. For all professions, including mortgage brokers, that require the state’s blessing to work legally, keeping a license in good standing is among the highest business priorities. Therefore, having a mortgage broker surety bond is too. 
  3. Stiff Penalties – If the state agency responsible for regulating mortgages catches a broker operating without a bond or without a license, there are penalties. Those can range from a small fine for a relatively minor misdeed, to a much larger fine. In the worst instances, the state may revoke someone’s mortgage broker license and their right to ever obtain a new license – effectively shutting them out of the mortgage broker industry in the state. Hopefully this illustrates the stakes for not following the rules and highlights the importance of having a mortgage mortgage broker bond at all times. 
  4. Business Opportunities –  People put tremendous faith in their mortgage broker to facilitate the sale of a home – one of the most expensive and important purchases a person will ever make. They need to trust their broker completely to be honest and look out for their interests. Mortgage broker bonds help establish that trust. Since bonds hold brokers financially accountable for illegal behavior, they help to discourage that behavior. And by giving mortgage seekers a way to recoup any losses they suffer, a mortgage broker surety bond makes it feel less risky to rely on a broker. Some brokers highlight the fact that they’re fully bonded as a way to attract clients looking for an honest professional to work with. 
  5. Industry Enrichment – Having a mortgage broker surety bond may be a requirement – and one with serious consequences if not followed – but the bond requirements that exist in all 50 states ultimately benefit all mortgage brokers and the home buying and lending industries as a whole. By holding manipulative and exploitative brokers accountable and keeping disreputable characters out of the mortgage industry, surety bonds uphold the character of the industry as a whole. They help people feel confident taking out mortgages and ensure the home lending system proceeds without unnecessary disruptions. The extent to which mortgage broker surety bonds enrich the industry exceeds the cost of the bond itself. Most seasoned brokers are glad the bond requirement exists. 

Viking Bond Service – A Partner to Mortgage Brokers Everywhere

For something as important to your career as a mortgage broker surety bond, you need the right surety bond partner. Brokers nationwide work with Viking Bond Service because we meet all their needs as efficiently and affordably as possible. As a leading surety bond provider, we can issue the exact bond you need in all 50 states, and make the process easy from beginning to end. Unlike many other surety bond providers, we serve applicants who have bad credit. Get more information about your bond by calling us at 1-888-278-7389 or by sending your questions through the contact form on this page. You can also get the bonding process started now. Complete this online application, and expect to get a quote for a mortgage broker bond within 24 hours!

What is a Contractor Bond?

A contractor bond is one of the most common types of surety bonds. Hundreds of thousands of Americans either have or need to get one of these bonds, which can fall into many different subcategories we will explore later. With something so important, it’s crucial to understand the ins and outs, know how these surety bonds affect you and your finances, and have a plan to obtain a surety bond if and when you need one. Read on.

Contractor Bond Definition

Contractor bond is actually a broad term that describes a variety of different kinds of surety bonds that contractors and construction companies may need to obtain. Surety bonds like these hold a contractor accountable if he or she doesn’t meet standards for quality, timeliness, cost controls, or others outlined within the work contract. The specifics vary widely depending on the type of surety bond, the state, and the circumstances. However, the fundamental principle of contractor surety bonds is always the same: guaranteeing that a contractor takes financial responsibility after failing to meet expectations.

Types of Contractor Bonds

Most of these surety bonds fall into one of five categories:

Bid Bond – Obligating a contractor to follow the terms of a bid
Payment Bond – Obligating a contractor to pay all subcontractors and material suppliers
Performance Bond – Obligating a contractor to meet specific performance standards
Warranty Bond – Obligating a contractor to honor the terms of a warranty
License Bond – Obligating a contractor to follow state licensure requirements

How Does a Contractor Bond Work?

In the event that a contractor doesn’t follow the terms of the work contract, the party who has been negatively affected by that contractor’s actions may file a claim against the surety bond seeking financial compensation equal to the cost of the damages. In a performance bond agreement, for example, if a contractor agrees to complete a project in 100 days and it takes 120 days, the other party in the surety bond agreement (called the obligee) may seek damages to cover the cost of the delay. The surety company that issues the bond agrees to settle (pay) any valid claims, after which they will seek to collect that same amount (plus interest and fees) from the contractor who holds the surety bond and triggered the claim. A surety company will always guarantee payment, but they will also always hold the bonded party financially responsible.

How does a Contractor Bond Benefit the Obligee?

Contractor surety bonds give the obligee – typically the party that hired the contractor, or the municipality that issued the contractor’s license – a way to seek justice and financial compensation if a contractor doesn’t do what he committed to doing. In addition to making the obligee whole, surety bonds offer a way to hold contractors accountable for improper business practices.

How does a Contractor Bond Benefit the Principal?

The principal – the term for the contractor who is the bonded party – must pay for the bond and for any claims filed against it. Despite the personal cost, however, the principal benefits from this arrangement too. That’s because surety bonds build trust between the obligee and the principal, which translates into more work for contractors. Ultimately, bond agreements are good for all involved.

Who Can Get a Contractor Bond?

Anyone who applies for one, gets approved, and pays the premium. To apply you will need to submit a standard surety bond application. That application will ask for information about your business, background, and finances. You may also need to supply additional documentation to help the surety bond company understand your financial standing and credit risk. The cost of a contractor bond can vary depending on whether or not you are considered a credit risk. Upon being approved, the surety bond company will quote you a price to to issue a bond with a 12-month term, or longer when applicable.

Do You Need to Renew a Contractor Bond?

In some cases yes and in other cases no. With a contractor’s license bond, you will need to have an active surety bond to maintain a valid license, meaning you will have to renew the bond annually. Renewal involves having your credit re-evaluated (which could raise or lower your premium price) and paying the premium again. With something like a performance bond, where the bond is tied to the outcome of a specific project, a contractor won’t need to renew the bond once the project concludes.

Viking Bond Service – A Partner to Contractors Nationwide

Contractor bonds are a hugely important business consideration for contractors, but they’re not the primary focus. From a contractor’s perspective, surety bonds should be affordable, accessible, and easy to manage. That’s why so many contractors work with Viking Bond Service, a nationwide surety agency helping all contractors find the surety bond they require. Complete a bond application at any time to get a no-obligation quote, or contact our team at 1-888-278-7389.

Bid Bonds: How Do They Work?

This is a common question, and an important one. If your business depends on winning bids to perform construction projects, you will likely need a bid bond at some point, and more likely need this particular type of surety bond on a regular basis. Bonding issues make it much harder to compete for bids, so it’s important to understand how this process works from beginning to end. In this post, the team at Viking Bond Service outlines everything you need to know about bid surety bonds.

The Basics of a Bid Bond

Before discussing bid bonds, it helps to understand performance bonds and payment bonds. Typically, contractors and construction companies must obtain these surety bonds before starting work on a project. A performance bond essentially guarantees anyone hiring construction workers that work will be done correctly or else damages will be paid. A payment bond issues damages if a construction company fails to pay subcontractors, laborers, or material suppliers. In order to safeguard themselves from risk and liability, most developers and project owners require anyone they hire to have a performance bond and payment bond.

A bid bond is essentially a way for contractors to prove during the bidding process that they can obtain the required performance and payment bonds if hired to complete the project. It’s comparable to a pre-approval for a loan. In the same way that pre-approval demonstrates to a seller that a prospective buyer can get a large enough mortgage to cover the cost of a home, a bid bond proves to a project owner that a prospective bid winner can later get bonded as the project contract requires. By securing a bond, the prospect proves they’re serious, qualified, and committed.

How does a Bid Bond work?

A Bid bond works in two ways. First, as discussed above, it proves the bond holder can later obtain any other bonds required. Second, bid surety bonds offer the project owner some protection against the risk of choosing the bid of someone who pulls out of the project before starting. If and when this happens, the project owner may file a claim against the bid bond for damages equal to whatever financial losses the contractor caused by abandoning the bid. The surety company that issues the bid bond backs the payment of all claims, but only as an intermediary. When the surety pays for a claim the bond holder must pay that amount back.

Requirements for a Bid Bond

Bid bonds themselves are relatively easy to get, as long as the bond applicant can also later get approved for a performance bond and payment bond. That depends in large part on the bond applicant’s credit score, financial history, and business strength. It also depends on the surety provider the bond applicant works with. Every provider sets their own requirements for who they approve for a bond, and some providers are more forgiving of bad credit or financial blemishes than others. If you’re worried about meeting the requirements for a bid surety bond, work with the team at Viking Bond Service. We specialize in getting more applicants approved for the bond they need regardless of credit.

How much does a Bid Bond Cost?

A bid bond doesn’t cost much on it’s own. However, by taking out a bid bond, the bond holder also commits to securing a performance and payment bond as well, which cost significantly more than bid bonds. You won’t need to pay everything upfront, but you will need to account for these costs as part of the project budget.

How to Avoid Bid Bond Claims

Bid bonds cost relatively little unless they result in claims, in which case they can cost the bond holder a lot. Fortunately, avoiding claims with bid bonds is simple compared to some other kinds of surety bonds, including performance and payment bonds. You simply need to commit to following through with any bid you win. In practice, that means only submitting bids (and obtaining bid bonds) for projects you have the resources to complete. Follow that rule, and the risk of claims is extremely low.

How to apply for a Bid Bond?

The application process varies for bids above and below $250,000. Below that amount, you will need to provide a standard bond application along with information about the bid, your business, and your bonding history. You will also need to submit to a credit check. Bids above that amount will require additional documentation to help the surety understand your credit risk.

Viking Bond Service – A Nationwide Authority on Bid Bonds

You shouldn’t underestimate the importance of bid bonds, but you shouldn’t stress about getting one either. With the right surety provider, bonding can be a quick, easy, and economical process – one that you use to win more bids on a consistent basis. Rely on Viking Bond Service, a leading surety bond company for everything you need, from service and support to the bonds themselves. Meet our team and ask any questions you may have by calling us at 1-888-278-7389. You can also make contact through the form on this page. Or, if a bid deadline is looming, get the process started by submitting your online application today.

7 Things You Need To Know About Construction Bonds

Construction bonds are a fact of life for many in the construction industry. That’s why it’s essential to understand how these contract surety bonds work, how they affect the parties involved, and what bonding means from a business perspective. This article covers seven things you need to know about construction bonds.

1 – What is a Construction Bond?

Construction bonds, also often referred to as contract bonds, are a category of surety bonds, used to ensure that a construction project is completed successfully according to all terms, conditions, specifications, and budget. These bonds hold a contractor or construction company, (also known as the principal), financially accountable if they fail to meet their contractual obligation. For example, if any work was not performed according to specifications, and the contractor is either unwilling or unable to correct the work, the project owner, (also known as the obligee), could use the construction bond to access funding to hire a new contractor to correct the work.

2 – How does a Construction Bond work?

When the outcome of a construction project fails to meet all terms, conditions, and specifications, the project owner may have a right to file a claim against the construction bond. The surety company that issued the bond will conduct an investigation into the claim. If it is a valid claim the surety will first see if the issue can be resolved through mediation, as this is can often be the fastest way to achieve resolution. However, if mediation is not possible the surety will quickly make financial compensation to the project owner so the project can continue with as little interruption possible.

A surety assumes a risk when bonding a contract. They guarantee a financial recourse is available to a project owner when a contractor fails, and the surety makes payment directly to the project owner themselves, instead of the project owner having to try and collect the funding from the contractor. The surety is then left to the task of collecting repayment for the claim from the contractor.

3 – How Do Construction Bonds Help with Managing Risk?

Having any substantial construction project completed involves risk. One way to manage that risk is by holding the contractor legally and financially responsible for any failures by requiring they bond the contract prior to construction beginning. If the contractor fails, the surety will step-in and assume the cost to correct the failure when the contractor refuses or is unable to correct the failure themselves.

4 – What are the Main Types of Construction Bonds

The term construction bond actually applies to three types of surety bonds, each related to a different kind of risk. They go by one name simply because construction companies often need all three of these bonds and rely on one surety provider to make bonding seamless:

Bid Bond – These bonds hold the principal accountable for withdrawing from a project they have won a bid to complete.
Performance Bond – These bonds hold the principal accountable if a project fails to meet performance standards established by the project owner.
Payment Bond – These bonds hold the principal accountable if that party withholds payment to subcontractors, laborers, or suppliers for invalid reasons.

5 – How Much Does a Construction Bond Cost?

There are a variety of factors used to determine how much it will cost to bond a contract, including but not limited to; the dollar amount of the contract, the type of work being performed, the experience of the contractor, the contractors credit and financial strength, as well as the relationship between a contractor and their surety. The cost of a bond is referred to as the rate, and it is expressed as a percentage of the total contract value.

Example: If a surety approves bonding a $50,000.00 contract with a rate of 2.5%, then 2.5% x $50,000.00 = $1,250.00 (the cost to bond is $1,250.00)

Generally speaking, smaller contracts up to about $500,000.00 will have a rate of between 2% – 4%. Mid-sized contract up to about $2,000,000.00 will have a rate 1.75% – 2.5%. Large contracts over $2,000,000.00 are often as 1%, and not typically higher than 2.%. Again, it is important to recognize the various factors that impact a contractor’s bond rate when trying to get the lowest rate possible.

One of the most important things a contractor can do to ensure they are getting the best rate possible, is to work with a reputable surety agency to develop a relationship. A reputable surety like Viking Bond Service will help a contractor grow and improve their bonding qualifications, which will help result in the contractor getting a better rate.

6 – What Projects Require a Construction Bond?


Construction bonds are commonly required on most public works contracts by cities, counties, and states, as well as federal contracts. However, any commercial project could potentially require a construction bond if the project owner determines that one should be required.

7 – How Bad Credit Could Prevent You from Getting a Construction Bond

The way a bond works where the surety pays a claim then has to seek repayment from the contractor, makes a bond an extension of credit just like any other extension of credit with the one notable exception that a contract does not ever want to have to utilize their bond.

Since contract bonds are a form of credit, if an applicant has bad personal or business credit, getting bonded can be challenging as credit rating is often used to determine risk. An applicant with credit concerns is statistically more likely to cause a claim against a bond, and less likely to pay the surety back for the claim.

The good news is there are sureties willing to work with applicants that have credit concerns. They specialize in assisting these contractors in getting bonded, so they can obtain contracts and continue generating income. If you have bad credit or have been denied a bond elsewhere, rely on Viking Bond Service to do everything possible to get you approved. We even have a special bad credit surety bond program designed specifically to approve more applicants for more bonds.

Viking Bond Service – Building America One Bond at a Time

When you require a construction bond in any amount in any state, work with Viking Bond Service. As a nationwide surety bond company that operates in all 50 states, makes service a top priority, and has abundant resources to offer, we do what other surety bond providers can’t or won’t. If you have questions about any aspect of construction bonds or simply want to talk through the details with a friendly expert, call us at 1-888-278-7389 or use the form on this page. You can also request a free bond quote at any time with no obligation to you.

Everything Contractors Need to Know About Bid Bonds in 2020

Bid bonds are a fact of life for contractors. Basically all public sector projects require contractors to have this type of surety bond before they’re allowed to submit a bid for work, and many private sector projects have the same requirement. Bid bonds hold a contractor financially responsible if they’re awarded a work contract but don’t accept the job. Developers and project owners use bid bonds as a way to discourage contractors from submitting bids they can’t or won’t fulfill, wasting valuable time and resources in the process.

How to Get a Surety Bond: Performance Bond Examples

Performance bonds are a type of surety bond that help contractors manage risks and make sure the job is done right. In 2750 BC, the pioneering historian Herodotus reported the use of performance bond agreements as a form of surety. Today, across public and private sectors alike, performance bonds are used by owners to ensure that contractors are up to the task. The extra security that a surety bond offers is an important part of a successful project.

Continue reading “How to Get a Surety Bond: Performance Bond Examples”

Surety Bonds and the COVID-19 Impact

The COVID-19 pandemic has affected every single industry, including surety bonds. That doesn’t come as much surprise considering that surety bonds are weaved into the fabric of the broader economy. Many professionals and businesses need them to operate legally, and most contracts aren’t complete until bonds are in place. When the outbreak of a global pandemic causes business activity across states and sectors to take an unprecedented plunge, one would only expect the surety bond industry to feel the impact.

Learn About Court Bonds

What’s a court bond? It’s a way for courts to hold defendants and plaintiffs accountable for paying financial judgments. When courts require someone to pay and they either can’t or won’t, the person they’re responsible for paying may file a claim against the surety bond. The surety company backing the bond will pay for all valid claims, and then they will collect the amount of the claim (plus interest and fees) from the original bond holder. For the bond holder (known as the principal) court bonds work like a line of credit. And for the beneficiary of the bond (known as the obligee) bonds guarantee they will receive the damages they are owed.