The cost of a surety bond, often referred to as the bond premium, varies based on several factors, including the bond type, your credit score, and your financial history. Understanding these factors is crucial to getting the best rate for your bond and ensuring your business is fully protected.
At Oso Insurance, we work closely with you to determine the most accurate and competitive bond premium tailored to your specific needs. Our goal is to help you secure the right bond at the right price, providing you with peace of mind and financial protection.
Your surety bond premium is determined by a combination of factors that assess the risk involved in issuing the bond. Key factors include:
A strong credit score can significantly lower your premium, while a lower score may result in higher costs. We work with all credit types to help you find the best rate possible.
Comprehensive financial statements give us insight into your business’s financial health, helping us offer more favorable rates.
The more assets you have, the lower your risk, which can lead to a reduced premium.
Extensive experience in your industry demonstrates reliability and can help lower your bond cost.
A clean claim history indicates lower risk and can positively impact your bond premium.
Several factors influence the cost of your surety bond, and understanding these can help you budget and prepare more effectively:
Your credit score plays a significant role in determining your bond premium. Higher scores typically lead to lower premiums, but even with bad credit, we can help you find a bond that fits your budget.
Different bonds have different levels of risk, which affects the cost. For example, a performance bond for a large construction project might cost more than a simple license bond for a small business.
Detailed and accurate financial statements help reduce perceived risk, potentially lowering your premium.
Verifying your business assets can demonstrate financial stability, which often results in a more favorable premium.
Your experience level within your industry can influence your bond cost. More experienced businesses are seen as lower risk, which can reduce the premium.
Different types of bonds have different cost structures. Here’s what you can expect:
License bonds typically cost between 1% and 5% of the bond amount, depending on your credit and financial history. They are essential for businesses to operate legally within their industry.
Construction bonds, including bid, performance, and payment bonds, generally cost between 1% and 3% of the contract amount. These bonds are crucial for contractors looking to secure larger projects.
Fidelity bonds, which protect your business against employee dishonesty, usually range from 0.5% to 2% of the bond amount, depending on the level of coverage required.