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Surety Bonds in Kentucky

Surety bond requirements are more common than you might think. People all across Kentucky are required to get surety bonds, often as part of their business or career, but for other reasons as well. Some people even choose to get bonds voluntarily. If Kentucky surety bond requirements apply to you or might in the future, this quick guide to surety bonds in Kentucky is for you.

How Does a Surety Bond in Kentucky Work?

There are dozens of different surety bond types, each with different details but the same underlying requirements. There are always three parties involved:

• Principal — The person who must get the bond and accept financial liability for claims filed by the obligee against the bond.
• Obligee — The party that requires the surety bond. If the principal violates the terms of the bond, the obligee may file a claim for compensation equal to the damages caused.
• Surety — The company that underwrites the surety bond. The surety guarantees the obligee a full settlement for valid claims. However, the principal must repay the surety the settlement amount with interest and fees included.

Surety bonds are a way to hold one party (the principal) accountable to another (the obligee). The surety acts like an arbitrator, ensuring that obligees receive the compensation they deserve while holding principals responsible for the misconduct they commit.

Types of Surety Bonds in Kentucky

Surety bonds fall into one of four common categories:

• Commercial – Small business owners and professionals often need to obtain Kentucky surety bonds as a condition of earning a state license.
• Contract – Contracts may require one party to obtain a surety bond guaranteeing they will meet performance standards outlined in the contract. These are common in the construction industry.
• Court – People involved in criminal or civil trials may be required by a judge to obtain a bond before the trial can proceed.
• Fidelity – Fidelity bonds protect businesses and their customers/clients from employee misconduct. They are voluntary – no business must have these bonds – but they are a good way to guard against risk.

Who Needs a Surety Bond in Kentucky?

Entrepreneurs, professionals, and contractors are the most likely to need a surety bond. They aren't alone, however. Surety bond requirements may be involved in any agreement where one party needs to establish trust in another. These requirements can also appear unexpectedly. Anyone and everyone should be prepared to get a Kentucky surety bond if and when they need one. Viking Bond Service is always here to help.

How to Get a Surety Bond in Kentucky

Obtaining a surety bond in KY involves a simple application process in most cases. You can often get a bond in just a day or two. Here's what to expect:

• Fill out a standard bond application with info about your business, background, and financial standing.
• Agree to undergo a credit check.
• Provide the surety with any documents it requests: bond requirements, financial statements, etc.
• Get a quote for the premium price – e.g. the cost to activate surety bond coverage for a set term.
• Pay the premium to activate coverage immediately.
• Show proof-of-bond coverage documents to the obligee.

The Cost of a Surety Bond in Kentucky

Underwriters at the surety use the application information to quote a custom premium price to each bond seeker. The cost of a surety bond depends on the type of bond and the amount of coverage. Prepare to pay a small percentage of the coverage amount, typically less than 10%, though some bonds have higher premiums. Credit standing partially determines the percentage someone pays.

Do You Need to Renew Surety Bonds in Kentucky?

Most commercial bonds need to be renewed. If they expire, it may lead to a professional or business license being suspended. The surety will provide regular reminders about the renewal to avoid accidentally missed deadlines. During renewal, the surety will run another credit check, review any changes to financial standing since the last renewal, then quote a new premium price. It could be less or more than before depending on credit changes.

Viking Bond Service – Bonds for the Bluegrass State

The hardest part about getting a bond is finding a company to work with. Look for an agency with a long history, strong reputation, and commitment to customer service, choose Viking Bond Service. We serve all parts of Kentucky, and we connect people with most kinds of surety bonds. You could have the bond you need in under 48 hours! Request a quote or contact us with questions at any time. You can also speak to a Kentucky bond expert over the phone at 1-888-2-SURETY (1-888-278-7389).