WA Scrap Metal Business Bond

This bond may be referred to as a Washington Scrap Metal Processor Surety Bond, or a Washington Scrap Metal Recycler Surety bond.

What is a surety bond, and why do I need one for my Washington scrap metal processor/recycler license?

A surety bond is a three-way agreement between a Principal (the individual applying for a Washington scrap metal processor/recycler license), an Obligee (Washington State Department of Licensing), and a surety company (the company that backs the bond). This bond is a guarantee to the Obligee that the Principal will adhere to all rules and regulations pertaining to their licensing. If they fail to do so, the Obligee is free from any financial obligations that may arise as a result. A surety bond is not insurance for the Principal – it is a protective measure from the Obligee and the public from any problems from a license violation.

You are required to file a Scrap Metal Business Surety Bond before your license will be issued. The form to submit your bond is here. This bond is for $10,000/year, and you can apply for a 1-, 2-, or 3-year bond. The prices for each bond are as follows:

  • 1 year – $100
  • 2 years – $175
  • 3 years – $250

This bond covers up to $10,000 of damages, but does NOT clear the principal of financial obligations for any payments made. In the event that there is a claim against your bond, your surety will make any payments to the claimant, at which point you will be required to repay the full amount to your surety. Contact your surety agent immediately if you have a claim filed against your bond. The guidelines for your bond are clearly covered by RCW Chapter 322, Section 15.

It is important to avoid claims against your bond. The easiest way to do this is to understand the terms of your license, and be sure to adhere to all of the laws, regulations, guidelines, and restrictions outlined. Claims against your bond act as marks against your bond “credit,” and will adversely affect any future surety bond applications. Your surety company may revoke your bond at any time, and if this happens, your license will be invalid until a new bond is filed.