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  • Writer's pictureBrianna Stephenson

How to Get Your First Surety Bond or Bond Program as a New or Emerging SDVOSB

Why Bonds are Required and What They Do

The Miller Act requires federal jobs of $150,000 or more to be financially guaranteed using a surety bond or letter of credit to ensure project completion and payment to subcontractors and suppliers. Similar statute has been adopted in most states and municipalities to financially guarantee public projects funded with taxpayer dollars. A letter of credit requires capital equal to the contract amount, while a surety bond teams you with a third-party financial guarantor to guarantee the total contract amount at about 1% to 3% of the contract amount. As a new or emerging contractor, a surety bond allows your company to bid on larger contracts or free up capital otherwise tied up in the letter of credit. Sometimes prime contractors will require subcontractors to ‘bond back’, meaning the subcontractor needs to provide a surety bond for their work with the prime contractor.

Finding A Surety Agent (Using Your Insurance Agent for Surety Is Not Usually Best Case for You)

Surety falls under the property and casualty insurance umbrella, and many agents do both insurance and surety. If you’re utilizing an insurance agent, make sure their agency is a member of the National Association of Surety Bond Producers (NASBP) to ensure they are a reputable and surety-capable agent. If you need to find an agent, you can use NASBP’s website to find a producer near you; the SBA also provides an agent finder for agents – only use these agents if you can’t get terms without SBA backing, as these have less satisfactory rates and terms.

Getting Your Bond

Once you find a surety agent, they will help gather all the information to present your company most appropriately to the underwriter. They may need an application, personal or corporate financial information, work history, resumes, references, and more. Surety Underwriters will determine what program terms you qualify for based on this information. A typical response is received within one day, and you should have the bond in hand within three days max if your agent manages to match you with an optimal surety partner. The underwriter’s response will include an underwriting decision and the rate and terms of the agreement. Once you, as the principal, accept the agreement and sign the indemnity, the physical copy of the bond should be to you within a couple of days under normal circumstances.

If you need your first bond, would like to get qualified for a bond program or would like a second look at your current program, please reach out to


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