Michigan 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 Michigan surety bond needs.
Continue reading below to learn more about common Michigan bonding requirements, or use our online form to request a quote now.

Required Surety Bonds in Michigan

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

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Required Surety Bonds in Michigan

There are three broad categories of surety bonds in Michigan: license bonds, contract bonds, and court bonds.

Michigan License Bonds

License bonds are often required at the state or local level (or both) as a condition for obtaining a license to operate a business or practice a profession. Michigan’s Licensing and Regulatory Affairs Department (LARA) and its various bureaus and agencies issue professional and business licenses at the state level.
For example, general contractors working on projects valued at over $600 must obtain either a residential builder’s license or an alteration contractor’s license from LARA, which requires the purchase of a surety bond.
Some municipalities also require bonding for businesses and professionals operating within their jurisdiction.

Michigan Construction & Contractor Bonds

Both the state of Michigan and certain municipalities require contractors to purchase specific types of contractor bonds—including bid bonds, performance bonds, payment bonds, and others—before being awarded a contract for a public works project.

Michigan Court Bonds

Michigan court bonds fall into two main categories: appeal bonds and probate bonds. Appeal bonds may be required from parties appealing a court decision when contested assets or sizable damage awards are involved. Probate bonds are required for people serving in a fiduciary capacity, such as an executor of an estate, guardian of a minor, or custodian of an adult.

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Our experienced professionals will gladly answer any questions you may have about Michigan surety bonds to help you get the bonds you need. Request a quote today!

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.