Texas is among America's best places to do business. From energy to logistics, to entertainment and tourism, many critical economic sectors thrive in the Lone Star State. To operate a successful business in Texas, business owners will need to make sure they're in compliance with state standards, including relevant license and permit standards issued by state agencies such as the Texas Department of Licensing and Regulation.
Often, this will include submitting an appropriate Texas surety bond when you apply for a business license to guarantee your business's obligations to its customers and to the Texas government. In this article, we'll talk about how to get a surety bond in Texas, as well as some of the most popular types of Texas surety bonds. To start, let's establish the key principles of what a surety bond is.
First, let's establish the answer to a key question: What is a surety bond? Basically, it's a legally binding three-party contract that guarantees one party's performance or payment of an obligation to another party. There are special terms for each of the parties to the surety bond agreement. They are:
Principal The party required to obtain a surety bond (usually a business or individual) Obligee The party that requires the principal to obtain a surety bond (usually a government agency) Surety The neutral third party that provides the financial guarantee (usually an insurance company or specialized surety company)
When an obligee believes that a principal has broken the law or violated their professional ethics, they can file a surety bond claim against the principal's bond for recourse. The principal is responsible for paying back any money that the surety pays to the obligee for a valid claim. For an in-depth explanation of how surety bonds work, see our article on understanding the three-party agreement of surety bonds.
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The bonding process for a Texas surety bond works similarly to most other states. The key steps for how to get a surety bond in Texas are as follows:
Many people wonder how long does it take to get a surety bond? The fastest and easiest way to get an affordable surety bond is to work with a surety bond broker with access to hundreds of different sureties, including sureties that specialize in bonding principals with bad credit. Next, we'll examine some of the most common surety bonds in Texas and how to get them.
There are hundreds of different types of surety bonds required for different businesses in Texas. Here are a few of the most common. In addition to these common surety bonds for businesses, many consumers will be required to apply for a Texas Bonded Title if the title to a vehicle has been lost or damaged.
Surety Bonds Direct makes it easier and faster to apply for a surety bond in Texas. You can get a free online surety bond quote today—it takes just a few minutes to apply for most types of bonds, and we work with principals with all kinds of credit. Whatever kinds of bonds are required in your industry, we invite you to contact us, apply for your free quote, and see how Surety Bonds Direct can get you the bonds you need. Need more information? Just contact us at 1-800-608-9950 to speak to our friendly surety bond experts.
Jason O'Leary
published: July 16, 2020You May Also Be Interested In
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