Maryland 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 Maryland surety bond needs.

Required Surety Bonds in Maryland

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

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Required Surety Bonds in Maryland

All of the surety bonds issued in Maryland can be categorized as one of the following: construction and contractor bonds, license and permit bonds, or court bonds.

Maryland Construction & Contractor Bonds

Maryland’s version of the federal Miller Act requires contractors being awarded public works contracts valued over $100,000 to purchase both performance and payment bonds. There may be similar requirements for local public works projects.

Maryland License & Permit Bonds

The many professional boards and commissions of the Maryland Department of Labor, Division of Occupational and Professional Licensing issue licenses to people in a wide variety of trades. In many cases, purchasing a license or permit surety bond is a required step in the licensing process. Municipalities and counties may have their own local licensing and bonding requirements.

Maryland Court Bonds

Courts at every level of Maryland’s legal system can order certain individuals to obtain a surety bond. Specifically, an appeal bond can be required from plaintiffs or defendants appealing a court decision, especially when there is contested property or significant monetary damages at stake.
The other main type of court bond is a probate (fiduciary) bond. This type of bond is required from anyone being named to manage another party’s assets, such as the executor of an estate or the guardian of a minor.

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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.