Utah 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 Utah surety bond needs.

Required Surety Bonds in Utah

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

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Required Surety Bonds in Utah

Utah surety bonds fall into three broad categories: construction and contractor bonds, license and permit bonds, and court bonds, with multiple bond types within each category.

Utah Construction & Contractor Bonds

The Miller Act mandates performance and payment bonds from contractors working on federally-funded projects valued at more than $100,000. Utah’s “Little Miller Act” doesn’t set a specific contract value above which bonding is required. Instead, it requires a contractor’s payment bond and a performance bond for 100% of the contract value, whatever that might be.

Utah License & Permit Bonds

Utah’s Division of Occupational and Professional Licensing—part of the state’s Department of Commerce—licenses dozens of occupations and professions. However, Motor Vehicle Dealers are licensed specifically by the Motor Vehicle Enforcement Division. Motor vehicle dealers and many business owners must purchase a license and permit bond as part of the licensing process. License and permit bonds provide financial protection for the state and consumers and help maintain high professional and industry standards.

Utah Court Bonds

Any of the courts in Utah can order the purchase of a surety bond under certain circumstances. People appealing previous court decisions may be required to buy an appeal bond, especially if the case involves contested property or a large damage award. Those appointed to serve in a fiduciary capacity, such as executors, guardians, or trustees managing assets that belong to someone else may be required to purchase a probate bond.

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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.