Surety Bond FAQ
What is a surety bond?
A surety bond is a contract between at least three parties: the Obligee, the Principal, and the Surety Company.
What is the role of each party?
The Obligee – The recipient of an obligation. The Principal – The primary party who performs the contractual obligation. The Surety – Assures the Obligee that the Principal can perform the task.
Who requires the surety bond?
Who is responsible to purchase the surety bond?
Is Bond Amount and Penalty the same?
Yes, Penalty is another term for the Bond Amount.
What types of Surety Bonds are available?
Although the type of Bonds we offer will vary from state to state, the four main bond categories are Commercial, Contract, Court, and Fidelity. See our complete list of bonds under the "Buy ABond Now“ Button Above.
How much does a bond cost?
This is determined by the risk of the bond or specific criteria of the Principal. In most cases, the bond ranges between 1.0% – 1.5% of the bond amount requested by the Obligee. For example: if a bond is $15,000, the premium would be in the ballpark of around $195.00. Several factors determine the premium, so rates can be different.
How can I purchase a bond?
With Palmetto Surety's online system you can apply and print your bond instantly. Some bonds might have an underwriting review prior to purchase. You will receive a notification if this should occur. You can also download the forms from our home page and fax or email them to one of our staff members to review and contact you.
How long is bond in place?
Most bonds are typically written for one year and need to be renewed annually. However, some bonds are offered for 1, 2, and 3 years and this option will be shown when you apply to purchase a specific bond. Some bonds are only valid for a set term. These term bonds have an end date typically less than one year. An example of a term bond would be a Construction Bid bond.