What is a miscellaneous surety bond?
A miscellaneous bond is a surety bond that does not fit into any specific category of fidelity or surety bond. Each type of miscellaneous surety bond is a legally binding agreement between three parties: an Obligee, a Principal, and a surety company.
The Obligee is the entity that requires the bond and establishes the obligations that the Principal (the party obtaining the bond) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the Principal.
Why do you need a miscellaneous surety bond?
Most miscellaneous bond types are required to ensure compliance with license and permit regulations. When the surety company issues a miscellaneous bond, they provide the Obligee a guarantee that certain damaged parties will receive payment for financial losses resulting from the actions of the Principal.
If the Principal fails to meet the obligations set out by the Obligee, the surety will pay out any damages up to the bond amount. The Principal is ultimately liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.
How much does a miscellaneous surety bond cost?
Miscellaneous surety bond costs vary depending on the total bond amount and the premium rate. 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 miscellaneous bonds can range from 1% to 10% of the total bond amount depending on the type of bond. During the application process, the surety company may evaluate your credit score, financial strength, and industry experience. For bonds requiring credit checks, applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a miscellaneous bond. EZ Surety still offers competitive rates to individuals with low credit scores or other financial issues.