California Surety Bonds

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California, also known as “The Golden State,” is the most populous state in the country with around 40 million residents. California’s capital city is Sacramento, and Los Angeles is the most populous city in the state (and second most populous in the country).

In addition to its significant economy, California is also regarded as a cultural hub and was the epicenter of the Gold Rush of the 1850s, the counter-cultural movement of the 1960s, and is the home of the American entertainment industry.

The State of California requires more surety bonds than any other state. A wide range of businesses including car dealers, insurance brokers, contractors, and others need to get bonded to abide by the rules and regulations of their trade.

What is a California surety bond?

A surety bond is a three-party agreement between; the business or individual required to get the bond (Principal), the company that issues the bond (the Surety), and the entity that requires the bond (the Obligee).

The purpose of a California surety bond is to provide a financial guarantee and protect consumers, institutions, and the general public from financial damages resulting from fraud, malpractice, or negligence on behalf of the Principal. Damaged parties file a claim against the bond seeking compensation. If a surety pays a claim, the Principal must reimburse the surety company.

Most Common California Surety Bonds

There are a wide variety of surety bonds required in California. These bonds fall into three primary categories:

  • Contract bonds: These performance bonds are required for public construction projects.
  • License bonds: These bonds are required as part of the registration process for various professions.
  • Court bonds: These bonds are required for several purposes in courts.

Here are some of the most common types of California surety bonds:

Contractor license bonds

California contractor license bonds are required by the California Contractor State Licensing Board (CSLB) for people that want to work on construction and other contracting projects.

Motor Vehicle Dealer Bonds

Motor Vehicle Dealer Bonds are required of all used car, motorcycle, and all-terrain (ATV) vehicle dealers and wholesalers to ensure they conduct ethical business practices.

Finance Lender Bonds

Licensed finance lenders are required to get a surety bond to comply with the California Finance Lenders Law.

Below are some of the other common California surety bonds:

How Much Do California Surety Bonds Cost?

The cost of a California surety bond depends on two factors: the required bond amount and your premium rate.

The required bond amount is set by the obligee. It represents the maximum amount that the surety may pay in the event of a successful claim against the bond.

Here are the bond requirements for some popular CA surety bonds:

  • Auto Dealer Bond: Varies
  • Car Wash Bond: $150,000
  • DMEPOS Bond: $50,000

Your premium rate is a percentage of the total bond amount that you must pay to get the bond. For example, a $10,000 bond with a 1% premium would cost $100 to get.

Premiums for surety bonds in California typically range between 1% and 15%. The big variance is due to the difference in risk between different types of surety bonds. Some bonds are riskier than others, leading the surety company to charge higher premiums to cover against potential claims.

When underwriting some bonds, the surety company will review your financial history and industry experience to determine your premium. You can still get a bond with bad credit but you may need to pay a slightly higher premium.

We Make Bonding Easy

We are a National Surety Agency based in Southern California for the past 25 years. We have the staff, knowledge, experience, and industry connections to get your business the best surety program, at the lowest bond rate, with exceptional customer service. We handle all court, commercial and contract bonding. Our team is ready to help get you bonded in California. Request a bond quote or give us a call today.


California Surety Bond Applications

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