North Carolina 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 North Carolina surety bond needs.

Required Surety Bonds in North Carolina

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

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Required Surety Bonds in North Carolina

There are three broad categories of surety bonds: construction and contractor bonds, license and permit bonds, and court bonds. There are multiple types of licenses in each category.

North Carolina Construction & Contractor Bonds

In North Carolina, any contractor working on a public works project funded by the estate’s taxpayers that is valued at $300,000 or more must obtain a payment bond to guarantee completion of the work. Any subcontractor providing materials and labor valued at more than $50,000 must purchase both a performance bond and a payment bond.

North Carolina License & Permit Bonds

North Carolina has established a number of occupational and professional licensing boards, such as the North Carolina Licensing Board for General Contractors. Obtaining a professional license often involves purchasing a surety bond to guarantee compliance with relevant statutes and requirements.

North Carolina Court Bonds

Courts at any level of the North Carolina judicial system may require people appealing a court decision to purchase a probate bond, most often when a case involves contested property. Courts that handle probate matters, such as the appointment of an executor for an estate or as guardian for a minor, may require a probate bond. A probate bond guarantees the lawful and ethical conduct of individuals named to manage 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.