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Surety Bonds in South Dakota

Surety bond requirements in South Dakota are more common than you think. People all over South Dakota face these requirements for multiple reasons, and sometimes unexpectedly. If and when you find yourself needing to obtain a surety bond, it's important to know how these legally-binding agreements work and what to expect from the bonding process. We cover all that below.

How Do Surety Bonds in South Dakota Work?

There are dozens of different surety bond types, each with a specialized purpose. For example, South Dakota motor vehicle dealer bonds only apply to people who sell cars and trucks. Though the details may be different, every kind of South Dakota surety bond serves the same basic purpose: to make the bondholder accountable to another party placing their trust in the bondholder. Surety bond agreements always involve three entities:

• Principal – The bondholder who must get the bond and pay for claims filed against it.
• Obligee – The bond beneficiary who may file claims against the bond for damages caused by the principal.
• Surety – The bond underwriter who agrees to settle claims with the obligee when the principal can't or won't. Since the principal has liability for claims, they must repay the surety the settlement amount or face the threat of collections or legal action.

South Dakota surety bonds provide an incentive for the principal to follow state laws and contractual mandates by holding them financially responsible for misconduct. Bonds make people accountable. They also ensure that anyone harmed by the principal can seek compensation equal to the damages incurred.

Who Needs Surety Bonds in South Dakota?

You may need a surety bond to get a business or professional license, to finalize a contract, to move forward with a court case, or even to start up utility service. Anytime one party needs to establish trust in another there may also be surety bond requirements involved. Since those requirements apply to so many people throughout South Dakota, everyone should know a surety agency like Viking Bond Service to rely on for help getting a bond.

Different Types of Surety Bonds in South Dakota

The four main categories of surety bonds include:

• Commercial – Bonds required to get a business or professional license.
• Contract – Bonds required in a contract. These are common in the construction and contracting industry.
• Court – Bonds that hold the principal liable for following a judge's orders.
• Fidelity – Bonds that pay a business or its customers for employee theft/damage. Fidelity bonds are voluntary, not usually required.

How to Get a Surety Bond in South Dakota

Some surety bonds involve a more extensive application process, but most take just a few steps to apply for and as little as a day to acquire. Find a surety agency like Viking Bond Service that can help connect you with multiple competitive bond offers. Then prepare to provide the following:

• A complete bond application
• Permission to run a credit check
• Additional documents (bond requirements, financial statements) as necessary

Underwriters will use this information to quote you a personalized premium (eg. the cost of the surety bond). Then just pay the premium to activate coverage, after which you will receive a document proving you have fulfilled your surety bond requirements.

What Does a Surety Bond in South Dakota Cost?

That depends on three factors:

• The kind of bond
• The amount of coverage
• Credit

Most bonds cost a small percentage of the coverage amount. Strong credit standing leads to lower bond prices, but the price for the same bond will be higher for people with low credit scores or issues on their credit record. Viking Bond Service offers a special program designed for bond seekers with bad credit – use it to your advantage!

Do You Renew Surety Bonds in South Dakota?

Some bond requirements only last for a set term, like contract bonds which only require the principal to have a bond for as long as the contract lasts or stipulates. Other bond requirements exist in perpetuity, like commercial bonds which the principal needs for as long as he or she has a license requiring a bond. Lapses in bond coverage complicate your licensure status and could lead to hefty financial and legal penalties, so it's important to keep the bond active and in good standing always, including by renewing it annually.

The surety will provide advanced notice about the renewal deadline. They will run a credit check during renewal, then adjust the premium price up or down to reflect credit changes over the past year. The last step is to pay the adjusted premium to activate coverage for another term. People who need to renew bonds should budget for the cost and, when possible, work to improve credit to keep costs from climbing.

Viking Bond Service for Surety Bonds in South Dakota

Surety bonds are important, but they don't have to be a hassle or a financial burden. Viking Bond Service has created a better way to get a bond, no matter what kind of bond you may need or in what amount. We serve the entire state of South Dakota!

Request a quote at your convenience – it costs nothing and comes with no strings attached – and get great information from our team of experts by contacting us online or calling 1-888-2-SURETY (1-888-278-7389).