Minnesota 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 Minnesota surety bond needs.

Required Surety Bonds in Minnesota

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

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Required Surety Bonds in Minnesota

All Minnesota surety bonds can be categorized as construction and contractor bonds, license and permit bonds, or court bonds.

Minnesota Construction & Contractor Bonds

Minnesota’s version of the federal Miller Act requires performance and payment bonds from contractors on public works projects valued at $25,000 and more. Projects valued over $100,000 require higher bond amounts than projects of $100,000 and under.

Minnesota License & Permit Bonds

Many of the professional licenses issued in Minnesota require the purchase of a license and permit surety bond. For example, becoming licensed as a specialty contractor, auto dealer, or mortgage professional all involve obtaining a license and permit surety bond as part of the licensing process.

Minnesota Court Bonds

Two types of court bonds are typically required by courts at all levels of Minnesota’s judicial system—appeal bonds and probate (fiduciary) surety bonds. The former is required in cases appealing a court ruling, especially if contested property is at stake. The latter must be purchased by anyone being appointed as executor of an estate, guardian of a minor, or in any other capacity that involves managing another person’s assets.

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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.