Louisiana Surety Bonds

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Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Louisiana surety bond needs.

Required Surety Bonds in Louisiana

Typical Louisiana bonds include (click on any for more info):

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Required Surety Bonds in Louisiana

The main surety bond categories are construction and contractor bonds, license and permit bonds, and court bonds.

Louisiana Construction & Contractor Bonds

Louisiana’s version of the federal Miller Act requires contractors entering into public works contracts valued over $25,000 to obtain a surety bond for at least 50% of the contract price. Cities and counties may also mandate bonding for local public works projects. Bid bonds, performance bonds, and payment bonds are the most commonly requested construction and contractor bonds.

Louisiana License & Permit Bonds

Louisiana issues licenses at the state level for some businesses and professionals, such as car dealers, health clubs, and mortgage lenders, brokers, and servicers. Obtaining such licenses typically requires purchasing a license and permit surety bond.

Louisiana Court Bonds

The courts in Louisiana sometimes mandate the purchase of a surety bond by a plaintiff or defendant appealing a prior decision of the court. This occurs most often when a case involves contested property or a large damage award. Also, anyone who will be serving in a fiduciary capacity, such as the executor of an estate or the guardian of a minor, may need to purchase a court bond commonly referred to as a probate bond.

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Frequently Asked Questions

There are three parties to every surety bond agreement, which is a legally binding contract:

  • The “obligee” is the state or local agency requiring the surety bond.
  • The “principal” is the party required to purchase the bond.
  • The “surety” is the company underwriting and issuing the bond.
  • The obligee sets the required amount of the bond, which is the maximum amount that will be paid out on a claim. The obligee also spells out the conduct required of the principal in order to avoid claims against the surety bond.

Any party who suffers a financial loss because the principal has violated the terms of the bond has the right to file a claim against the bond. The principal is solely responsible for paying all valid claims.

However, the surety will often pay a claim and wait to be reimbursed by the principal. This ensures timely settlement of the claim and gives the principal some time to gather the necessary funds.

What the principal in a bond agreement actually pays for a surety bond is a small percentage of the required bond amount established by the obligee. That percentage, known as the premium rate, is determined by the surety company based on the applicant’s credit score and other indicators of the likelihood of claims being filed against the bond. Those with good credit can expect a rate of 1-3%. Those with poorer credit may pay a higher premium.
No claim against a bond will be paid until the surety company has investigated and determined that it is valid. After making payment to a claimant, the surety company will demand reimbursement from the principal.