A surety bond is a contract that promises you will follow through with your obligations and follow the rules of your industry. Depending on what type of bond you need, your obligations and duties will be different.
If you need a surety bond in Michigan, you might be confused where to start. This is a step-by-step guide on what to expect when you get a Michigan surety bond.
Step #1: Contact Surety Bond Company and Apply for Bond
You can get a surety bond from your local insurance agent, but most people choose to get a surety bond from an actual surety bond company.
Most surety bond companies allow you to apply for your bond online.
To apply for your bond, you will need to provide the surety company with personal and business information.
Step #2: Evaluation and Pricing
Once you’ve submitted your Michigan surety bond application, a surety bond underwriter will evaluate your application to determine the risk of bonding you.
One of the main risk factors is your credit score. If you have good credit, you are seen as low risk. If you have bad credit, you are seen as high risk.
Why? Read this post or watch this video about why your surety bond requires a credit check.
If you are approved for a Michigan surety bond, the underwriter will provide you with quotes.
You do not have to pay the full bond amount to get bonded.
You will pay anywhere from 1-15% of the total bond amount.
The below chart gives you an idea of how much you might pay for a Michigan surety bond:
Step #3: Pay for Bond
The last step is to pay for your bond. Most companies allow you to pay online through a payment portal.
Before you pay, you will need to sign an indemnity agreement.
Purpose of a Michigan Surety Bond
Some Michigan bonds are considered “electronic original” which means you can print the bond from your own computer. If your bond is not an electronic original, it will be mailed to you. Turn your bond into the governing authority that requires the bond from you.
The purpose of your bond is to ensure you follow through with your duties and follow rules and regulations. If you fail to do this, someone can make a claim against your bond.
If the surety company has to pay out on a bond claim, they will come to you for reimbursement. You are responsible for repaying every single penny of a bond claim. So be sure to understand the obligations of your bond.
If you are ready to get a Michigan surety bond, you can browse available Michigan surety bonds.
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