Q:

How much does a surety bond cost?

A:

Quick Answer

The price of surety bonds ranges between 1 and 15 percent of the bonded amount. Therefore a bond worth $10,000 at a 5-percent rate costs the holder $500 annually. According to Lance Surety Bond Associates, Inc., bond applicants usually pay a lump sum for one year's worth of coverage.

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Full Answer

Because surety bonds are issued for a number of reasons, the cost of the bond is contingent on the on the bond payer's personal and business credit, industry experience, and personal and business finances. The reason for the bond is considered when determining cost, as well.

Lance Surety defines a surety bond as an agreement between a principal, obligee and surety that safeguards consumers and obligees from the costs related to a principal's misconduct, abuse or fraud. The most frequently secured bond in the United States is related to licensing. These types of bonds must be filed with a business license to make sure a bonded principal complies with the license regulations currently in force.

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