Surety Bonds
- Trust & Guarantee Protection
Build Trust & Win More Contracts with Surety Bonds
- Understanding Bonds
What Are Surety Bonds?
A surety bond is a three-party agreement that guarantees the fulfillment of an obligation or contract.
Principal
The business or individual who purchases the bond and promises to fulfill an obligation. This is typically you — the contractor, business owner, or professional.
Obligee
The party requiring the bond as protection. This could be a government agency, project owner, or client who wants assurance that work will be completed properly.
Surety
The insurance company that backs the bond and guarantees payment if the principal fails to meet their obligations. They assess risk and issue the bond.
How Is a Bond Different from Insurance?
While both provide financial protection, they work differently. Insurance protects the policyholder from losses, while a surety bond protects the obligee (the party requiring the bond) from losses caused by the principal’s actions.
If a claim is paid on a surety bond, the principal is responsible for reimbursing the surety company. This makes bonds more like a line of credit backed by your business’s financial strength and reputation.
Key Differences:
- Insurance: Protects the policyholder from covered losses
- Bonds: Protects third parties from your failure to perform
- Insurance: Claims are paid without reimbursement requirement
- Bonds: Principal must repay the surety for any claims paid
- Bond Categories
Types of Surety Bonds We Offer
We provide a comprehensive range of surety bonds to meet the diverse needs of Iowa businesses and professionals.
Contract Bonds
Required for construction projects, these bonds guarantee that contractors will complete work according to contract terms and pay subcontractors and suppliers.
Common Types:
License & Permit Bonds
Required by government agencies to obtain business licenses. They guarantee compliance with laws, regulations, and ethical business practices.
Common Types:
Court Bonds
Required in legal proceedings to protect parties from potential losses. They ensure compliance with court orders and judgments.
Common Types:
Commercial Bonds
Protect businesses and their customers in various commercial transactions and ensure honest business dealings.
Common Types:
Public Official Bonds
Required for elected or appointed officials to guarantee faithful performance of their duties and protect public funds.
Common Types:
Fidelity Bonds
Protect businesses from employee dishonesty, theft, and fraud. Essential for businesses handling money or valuable assets.
Common Types:
- Bond Mechanics
How Do Surety Bonds Work?
1
Bond Requirement Identified
A project owner, government agency, or client requires you to obtain a bond before starting work or receiving a license.
2
Application & Underwriting
You apply for the bond, and the surety company evaluates your financial strength, credit history, and experience to determine your premium rate.
3
Bond Issued
Once approved, you pay the premium (typically 1-3% of the bond amount) and receive your bond certificate to present to the obligee.
4
Protection in Place
If you fail to meet your obligations, the obligee can file a claim. The surety pays valid claims, then seeks reimbursement from you.
- Pro Tip: Maintaining good credit, strong financials, and a clean claims history will help you secure better bond rates and higher bonding capacity.
1-3%
Typical Premium
- Industries We Serve
Who Needs Surety Bonds?
Many businesses and professionals are required to obtain surety bonds to operate legally, bid on projects, or demonstrate financial responsibility.
Contractors & Builders
General contractors, subcontractors, and specialty trades often need bid, performance, and payment bonds for public and private projects.
Auto Dealers
Motor vehicle dealers in Iowa must obtain dealer bonds to protect consumers and ensure compliance with state regulations.
Freight & Logistics
Freight brokers, motor carriers, and logistics companies need bonds to operate legally and protect shippers.
Real Estate Professionals
Mortgage brokers, title companies, and property managers may need bonds for licensing and consumer protection.
Service Businesses
Janitorial services, security companies, and staffing agencies use fidelity bonds to protect clients from employee theft.
Public Officials
Elected officials, treasurers, and notaries public are often required to be bonded to protect public interests.
Serving Iowa Businesses Statewide
From Des Moines to Cedar Rapids, Davenport to Sioux City, we help businesses across Iowa obtain the bonds they need quickly and affordably.
- Des Moines
- Davenport
- Iowa City
- West Des Moines
- Cedar Rapids
- Sioux City
- Ankeny
- Ames
- Simple Process
Getting Bonded Is Easy
Our streamlined process gets you bonded quickly so you can focus on your business.
01
Contract Bonds
Required for construction projects, these bonds guarantee that contractors will complete work according to contract terms and pay subcontractors and suppliers.
- 5 minutes
02
License & Permit Bonds
Required by government agencies to obtain business licenses. They guarantee compliance with laws, regulations, and ethical business practices.
- 1-2 days
03
Court Bonds
Required in legal proceedings to protect parties from potential losses. They ensure compliance with court orders and judgments.
- 24-48 hours
04
Court Bonds
Required in legal proceedings to protect parties from potential losses. They ensure compliance with court orders and judgments.
- Same day
Fast Turnaround
Most bonds issued within 24-48 hours. Rush processing available for urgent needs.
Competitive Rates
We shop multiple surety companies to find you the best rates available.
Expert Support
Our team guides you through every step and answers all your questions.
- Why Choose Us
Why Get Your Bonds Through Densmore Insurance?
As an independent insurance agency, we have access to multiple surety companies and can shop the market to find you the best bond at the best price. Our local expertise and personalized service make the bonding process simple and stress-free.
Independent Agency
We work with multiple surety companies to find you the best coverage and rates — not just one carrier's options.
Fast Processing
Our streamlined process and strong carrier relationships mean faster approvals and bond issuance.
Bonding Capacity Growth
We help you build your bonding capacity over time as your business grows and takes on larger projects.
Local Iowa Expertise
Based in Bondurant, we understand Iowa's bonding requirements and regulations for local businesses.
Personalized Service
You'll work directly with experienced agents who take time to understand your specific needs.
Ongoing Support
From renewals to claims assistance, we're here to support you throughout the life of your bond.
500+
Bond Issued
Common Questions
Surety Bond FAQs
Get answers to the most common questions about surety bonds.
How much does a surety bond cost?
Surety bond premiums typically range from 1-3% of the bond amount for applicants with good credit. For example, a $25,000 bond might cost $250-$750 per year. Factors affecting your rate include credit score, financial strength, industry experience, and the type of bond required.
What credit score do I need to get bonded?
While requirements vary by bond type and amount, most standard bonds require a credit score of 650 or higher for the best rates. However, we work with surety companies that offer bonds for applicants with lower credit scores — you may just pay a higher premium. We can help find options regardless of your credit situation.
How long does it take to get a surety bond?
Many bonds can be issued within 24-48 hours once we receive your completed application. Simple license bonds may be issued same-day. Larger contract bonds requiring more extensive underwriting may take 1-2 weeks. We offer rush processing for urgent situations.
What happens if a claim is filed against my bond?
If a valid claim is filed, the surety company will investigate and may pay the claimant up to the bond amount. However, unlike insurance, you (the principal) are responsible for reimbursing the surety for any claims paid. This is why maintaining good business practices is essential.
Do I need collateral to get a surety bond?
Most bonds don’t require collateral if you have good credit and financials. However, for larger bonds or applicants with credit challenges, the surety may require collateral such as cash, certificates of deposit, or letters of credit to secure the bond.
What's the difference between a bid bond and a performance bond?
A bid bond guarantees that if you win a contract, you’ll enter into the agreement and provide the required performance bond. A performance bond guarantees you’ll complete the project according to contract terms. Bid bonds are typically required during the bidding process, while performance bonds are required after contract award.
Can I get bonded if I have a bankruptcy on my record?
Yes, it’s possible to get bonded after bankruptcy, though it may be more challenging and expensive. The surety will consider how long ago the bankruptcy occurred, your current financial situation, and your business track record since then. We work with sureties that specialize in harder-to-place bonds.
How do I increase my bonding capacity?
To increase your bonding capacity, focus on building strong financials (working capital, net worth), maintaining good credit, completing projects successfully, and developing a track record in your industry. We can help you create a plan to grow your bonding capacity over time.
Get Started Today
Request Your Surety Bond Quote
Ready to get bonded? Fill out the form and one of our surety bond specialists will contact you within 24 hours with a competitive quote tailored to your needs.
Call Us
(515) 967-3390
info@densmoreis.com
Address
85 Paine Street SE, Suite G, Bondurant, Iowa 50035