How are surety bonds paid?

One of the most commonly asked questions about surety bonds is in regards to the payment terms, after all, expenses and cash flow are hugely important to a business! The first step in understanding how surety bonds are paid is to look at the application process as a whole. To apply for a surety bond you’ll submit a surety bond application with information about your personal and business finances. This information is used to calculate your bond premium. In general, bond premiums range from 1% to 5% of the bond amount for people with good credit and 5% to 15% for those with poor credit.

When do I pay for a bond?

The majority of bonds must be paid in full before the surety bond is issued; in fact, it’s extremely rare that any bond service will offer a payment plan. It’s important to remember that your payment must clear before the surety bond is written, so choose your payment method wisely! Surety bonds do not work like insurance. They’re actually more like a form of credit where the bond underwriter promises to pay expenses on behalf of the principle, who is the person taking out of the bond. The principle must then repay the underwriter in full.

Paying for a renewed surety bond

Many surety bonds can be renewed to extend the bond coverage period. If your bond is renewable you’ll need to pay the premium for the new coverage term before your existing bond runs out. If you fail to pay the premium before the bond expires you will not be able to renew the bond and will instead have to go through the application process again.

Finding the best deal

Viking Bond Service can help you get the best deal for your surety bond. We work with many surety bond providers to find you the best rate for the bond you need. We’ll never charge you to provide bond quotes, so why not try our premium bond service today? Call, or apply online to get a surety bond quote within 24 hours!