Getting a license to legally operate as a business in North Carolina often requires posting a surety bond. This is a contractual agreement involving three parties, known as the obligee, the principal, and the surety, and an insurance service will guide you through the application process. Bonds are used to give an obligee assurance that the principal will fulfill all their duties as outlined in the contract. The responsibility of the surety is to provide collateral for the bond and ensure the terms of the contract are met.

Types of Surety Bonds

There are three main types of surety bonds in North Carolina. A license and permit bond are generally prerequisites for acquiring a professional license with the state, local, or city authority that governs the applicant’s trade. Contract bonds are a requirement for any construction contractor bidding on a public or private job. Court bonds aren’t as common as the other two, but they must be secured if you wish to bring a case to an appellate court or you have been designated as the guardian of another person’s estate.

Cost of NC Surety Bonds

The cost of a surety bond will depend on a few different factors. First, each kind of bond has a different total amount. You will be responsible for paying a percentage of this, which is calculated by taking your personal credit score, business financials, assets and liquidity, and professional experience into account. The surety will determine how much of a risk is involved in getting you bonded. Therefore, the stronger your finances are, the lower the bond premium is likely to be. An insurance service will provide you with a bond quote once your application is submitted.

Surety bonds are distinct from other forms of business insurance, so it’s imperative that you understand which type of coverage is right for your profession. As an insurance service that specializes in surety bonds, Zimmerman Insurance Agency offers a full range of products and will walk you through the application process with ease. The team has served the High Point, NC, area since 1963 and knows how to help you no matter the line of work you’re in. Contact them at (336) 883-6512 to speak with an experienced broker, or visit their website to learn more about their insurance services.