Ohio Surety Bonds

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 Ohio surety bond needs.

Required Surety Bonds in Ohio

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

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Required Surety Bonds in Ohio

All surety bonds issued in Ohio fall into one of these three broad classifications: construction and contractor bonds, license and permit bonds, or court bonds.

Ohio Construction & Contractor Bonds

Ohio’s “Little Miller Act” requires a bid bond from any contractor bidding on a public works project. The amount of the bid bond is typically a percentage of the bid (usually anywhere from 5% to 20%). A winning bidder may be required to purchase a performance bond and/or payment bond as a condition of a contract award.

Ohio License & Permit Bonds

In addition to the business license that every business must have, Ohio requires people engaged in certain occupations or professions—267 of them to be exact—to obtain a license or permit in that field as well. In many cases, purchasing a license or permit bond is a prerequisite for licensing.

Ohio Court Bonds

Any Ohio court can order the purchase of a surety bond under certain circumstances. Individuals appealing a court decision may need to obtain an appeal bond, especially in cases involving contested property. A judge may also order a probate bond from anyone being appointed to a position involving fiduciary responsibilities, such as an executor of an estate or 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.