Pennsylvania 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 Pennsylvania surety bond needs.

Required Surety Bonds in Pennsylvania

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

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Required Surety Bonds in Pennsylvania

Pennsylvania surety bonds fall into one of three broad categories: construction and contractor bonds, license and permit bonds, or court bonds.

Pennsylvania Construction & Contractor Bonds

Pennsylvania has its own version of the federal Miller Act, which mandates the purchase of performance and payment bonds by contractors working on taxpayer-funded projects above a certain value. Pennsylvania’s “Little Miller Act” requires a surety bond for the full amount of any public works project valued at more than $5,000.

Pennsylvania License & Permit Bonds

The Bureau of Professional and Occupational Affairs—part of the Pennsylvania Department of State—issues licenses in a wide range of professions and occupations, from accountants to funeral directors. The requirements for licensing in many cases include purchasing a license and permit surety bond as a guarantee of the bonded individual’s (the principal’s) lawful and ethical conduct.

Pennsylvania Court Bonds

Pennsylvania courts have the option of requiring two different types of court bonds: appeal bonds and probate bonds. Appeal bonds most often are only required when there is contested property or large damage awards at stake. Probate bonds are required from people named to handle another person’s finances, such as an executor of an estate or conservator of an incapacitated individual.

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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.