License and Permit Bonds

Learn more about License and Permit Bonds

What is a license and permit bond?

Certain types of businesses are required by their state or local municipality to post a license and permit bond as part of the licensing process to legally operate.

The bond guarantees that damaged parties will receive payment for financial losses resulting from a violation of the statutes and regulations set forth by the license. If the licensed business fails to meet the obligations set out by the government agency, the surety will pay out any damages up to the bond amount. The business is ultimately liable for the losses and is legally required to reimburse the surety company for any damages paid.

Popular types of license and permit bonds

Contractor License Bonds

Most states require construction contractors to post a contractor license bond for eligibility to work in the state. The bond ensures that construction professionals comply with all licensing laws and regulations.

Freight Broker Bonds (BMC-84)

Freight brokers and forwarders are required by the Federal Carrier Safety Administration (FMCSA) to post a $75,000 surety bond to receive their license. The bond helps ensure the freight forwarders and brokers meet industry standards and pay motor carriers on time.

Auto Dealer and Repair Shop Bonds

Most states require auto dealer bonds for car dealerships to be eligible to sell new or used motor vehicles. The bond helps ensure that the motor vehicle dealer complies with industry regulations and protects consumers from financial loss resulting from the unethical actions of the dealership.

Notary Bonds

Notary bonds help guarantee that notary publics perform their duties ethically and in accordance with the law.

Bonded Title Bonds

Vehicle title bonds are required in most states when an individual does not possess the original title to a motor vehicle. The bond guarantees that any other party who can prove true ownership of the vehicle will receive payment for financial damages.

Tax Preparer Bonds

Tax preparer bonds are required in some states for non-exempt tax preparers to be eligible to work on a client's tax returns. The bond protects the client from fraud, misrepresentation, theft, or negligence on the part of the preparer.

Mortgage Broker and Finance Bonds

Most states require mortgage brokers, lenders, servicers, and loan originators to buy a mortgage broker bond as part of the licensing process to operate in the state.

Insurance Broker & Adjuster Bonds

Some states require insurance professionals to purchase an insurance broker bond as part of the licensing process to operate in the state. The bonds help ensure that the professionals conduct their business in accordance with state and local regulations.

School District Bonds

School bonds are required in some states before contractors are eligible to work on construction projects for school districts. Some states where you need a surety bond include California and New York.

Immigration Consultant Bonds

Immigration consultant bonds are required in some states to operate as a licensed immigration consultant.

Public Official Bonds

Most states require public insurance adjusters to post a public adjuster surety bond to obtain a license to operate in the state.

Durable Medical Equipment, Prosthetics and Orthotics Suppliers Bond (DMEPOS) Bonds

DMEPOS bonds are required before DMEPOS suppliers can receive accreditation to bill the Medicare Program for the goods they provide to customers. The bonding requirement was established to help reduce Medicare billing fraud.

Collection Agency Bonds

Collection Agency Bonds are required in most states to ensure that collection agencies adhere to industry standards and regulations. The bonds also help boost the credibility of the bonded agency.

Process Server Bonds

Process server bonds are required in some states and counties to be appointed to deliver and serve court documents and legal notices.

Talent Agency Bonds

Talent agency bonds are required in some states to obtain a license to operate a talent agency. The bond provides financial protection to the customers (musicians, models, actors, writers, authors, movie makers) of a licensed talent agency.

Nursing Facility Patient Trust Fund Bonds

Nursing facility bonds are required for nursing facilities to receive their license and guarantee that the facility will adhere to all licensing regulations. Patient trust bonds are used to help protect trust fund assets for patients receiving care in a nursing home.

Right of Way Encroachment and Road Bonds

Contractors who perform work in a public right of way are required to post a surety bond. The right of way bond helps protect governments and consumers from the negligent practices of the contractor.

Other popular types of license and permit bonds

Auction and Auctioneer Bonds

Most states require auctioneer bonds for an individual to be eligible to operate as a professional auctioneer.

Hunting & Fishing License Bonds

Hunting and fishing bonds are required in some states before being eligible to obtain a license to take people on hunting or fishing trips or sell hunting or fishing licenses.

Appraisal Management Company (AMC) Bonds

Appraisal management companies are required to post a surety bond to ensure that they comply with federal and state regulations.

Boxing and Mixed Martial Arts Promoter Bond

Boxing and mixed martial arts promoters are required to post a sports promoter bond to obtain a license to promote sporting events in their state. The bond provides financial protection to the athletes performing in the events.

Cigarette and Tobacco Distributor and Tax Bonds

Cigarette and tobacco distributor bonds are required in most states for retailers, distributors, and wholesalers selling tobacco products. The bond provides a financial guarantee that all tobacco taxes are paid on time.

Cosmetology, Esthetics and Barber School Bonds

Cosmetology school bonds are required in some states as part of the licensing process to operate a training school for cosmetologists or estheticians. The bond helps protect customers' prepaid tuition if the business were to close.

Employment Agency Bonds

Employment agency bonds are required in some states before being eligible to operate an employment agency.

Driving School Bonds

Driving school bonds are required in some states for eligibility to obtain a license to operate a driver education or training school. The bond helps protect the student's’ prepaid tuition from potential fraud by the driving school.

Private Investigator, Detective or Security Guard Bonds

Private investigator bonds are required in some states before obtaining a license to operate as a private investigator. The bonds are also required for other professions including private investigation agencies, security guards and agencies, and private security agencies.

Real Estate Broker Bonds

Real estate broker bonds are required in most states as part of the licensing process to operate as a real estate broker. The bond guarantees that the buyers and sellers in a transaction involving a licensed broker will receive payment for financial losses resulting from any violation of the broker's license.

Agricultural and Dairy Bonds

Agricultural bonds and dairy bonds are required for agricultural businesses and milk handlers to comply with U.S. Department of Agriculture and state regulations

Preneed Funeral and Cemetery Bonds

Funeral bonds are required in some states for funeral homes offering preneed funeral insurance. The bonds provide financial protection to the customers who prepay for funeral services.

Excavation, Demolition and Earthmoving Bonds

Excavation and demolition bonds are required in some states for eligibility to obtain a permit to perform excavations or demolitions. The bonds ensure that contractors follow state and municipal regulations and that the owner of the project is reimbursed if the contractor does not fulfill their contractual obligations.

Drain Layer's License Bonds

Drain layer bonds are required in some states for eligibility to obtain a permit to work on the construction or cleaning of any subsurface structure designed to collect or transport wastewater.

Health Club or Spa Bonds

Health club bonds are required in some states before being eligible to obtain a license to operate a health club, health spa, self-defense school, or any other fitness facility that offers prepaid memberships.

Pawnbroker Bonds

Pawnbroker bonds are required in some states as part of the licensing process to operate as a pawnbroker or secondhand dealer. The bond helps protect customers and suppliers from financial losses resulting from violations of the pawnbroker license.

Precious Metal and Gem Dealer Bond

Precious metal and gem dealer bonds are required in some states before being eligible to obtain a license to operate a business that buys or sells precious metals or gems.

Sewer and Septic Tank Bonds

Sewer bonds are required in some states before being eligible to obtain a license to install or repair sanitary sewer systems, septic tanks, manholes, or pump stations. The bonds help protect the general public by ensuring proper construction and installation.

Sign Contractor Bonds

Sign contractor bonds are required in some states for eligibility to fabricate or install signs or any related wiring onto posts or poles. The bond helps ensure that work is performed properly and that damaged parties will receive payment for financial losses.

Telemarketing Bonds

Telemarketing bonds are often required of telemarketing companies for obtaining a license to call residents within a specific state.

Waste Hauler and Recycling Disposal Bonds

Waste hauler bonds are required in some states before being eligible to obtain a license to collect, transport, and dispose of solid waste or recyclable materials.

Well Drilling Plugging and Reclamation Bonds

Well drilling bonds are required in some states to obtain a license to perform well drilling, well repair, well inspecting, pump installation, or water system contracting.

Workers' Compensation Self-Insurers Bond

Employers must provide for payment of workers compensation claims to their employees by either obtaining insurance or a certificate for self-insurance. Employers who choose to self-insure are often required to post a surety bond to ensure workers compensation claims are paid.

Manufactured Housing Bonds

Manufactured housing bonds are required in some states to obtain a license to operate as a mobile home dealer, installer, retailer, broker, salesperson, or manufacturer.

Laundry and Laundromat Bonds

Laundry bonds are required in some states for eligibility to obtain a license to operate a laundromat or dry cleaning service. The bonds help protect customers who store their clothing at the service facility.

Medical Equipment & Pharmacy Bonds

Medical equipment and pharmacy bonds are required in some states for eligibility to obtain a license to distribute prescription and non-prescription drugs or medical equipment.

Miscellaneous Surety Bonds

Miscellaneous bonds are any surety bond that does not fit into any specific category of fidelity or surety bond. Most miscellaneous bond types are required to ensure compliance with license and permit regulations.

Professional Solicitor & Fundraiser Bonds

Professional fundraiser bonds are required in some states to obtain a license to operate as a professional solicitor or fundraiser for a charitable organization. The bonds protect donors against any fraudulent actions of the fundraiser.

Landscape Contractor Bonds

Landscape contractor bonds are required in some states to obtain a license to operate as a landscape contractor.

Wage & Welfare Bonds

Businesses are required to post a wage and welfare surety bond to be eligible to hire members of a union. The bond guarantees that union members will be compensated according to the collective bargaining agreement.

How much does a license and permit bond cost?

License and permit surety bond costs vary depending on the type of bond and the length of the bond's term. The Obligee sets the required bond amount and the surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for license and permit bonds typically range between 1% and 5%.

Some types of license and permit bonds can be issued without an underwriter's review. Others are riskier and will require the surety company to evaluate your credit history and financial strength. 

For bonds with more extensive underwriting, good credit can lead to lower rates, however bad credit will not affect your ability to get bonded as EZ Surety has various options for individuals with bad credit.

How do you get a license and permit bond?

To obtain a license and permit surety bond, you must research the type of bond that you need and its specific requirements. From there, you apply online for the bond through a surety company or agency.

The surety company will collect personal and business information such as names, addresses, social security numbers, and employee identification numbers. Their underwriters will use this information to review your financial strength and assess the risk of issuing you the bond.

After your application is approved, you will receive a surety bond quote with the bond premium. If you accept the quote, you pay the premium and the surety company issues you the bond.

EZ Surety makes it easy to obtain a wide variety of license and permit bonds. You can complete our online application in minutes and many bonds are issued instantly.


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