Virginia 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 Virginia surety bond needs.

Required Surety Bonds in Virginia

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

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Required Surety Bonds in Virginia

There are three broad categories of Virginia surety bonds—construction and contractor bonds, license and permit bonds, and court bonds—with a number of specific types of bonds in each category.

Virginia Construction & Contractor Bonds

Virginia’s “Little Miller Act” requires contractors to be bonded in order to work on public projects valued above $500,000 ($250,000 for a transportation or highway project). This applies to contracts at the state, county, or municipal level. The requirement is for a contractor’s payment and performance bond to secure payment of subcontractors and performance of the work.

Virginia License & Permit Bonds

Virginia’s Department of Professional and Occupational Regulation oversees 20 different boards responsible for licensing individuals in dozens of different trades, professions, and businesses. In many cases, license applicants are required to purchase a surety bond ensuring their lawful and ethical conduct. Motor vehicle dealers are licensed by Virginia’s Motor Vehicle Dealer Board and must purchase a $50,000 license bond as part of the process.

Virginia Court Bonds

Any court in Virginia can require persons with certain matters before the court to purchase a court bond—either an appeal bond or a probate bond. Anyone pursuing an appeal of a prior court decision may be required to obtain an appeal bond, especially if contested property or a large damage award is involved. Anyone named in a will or other legal document to serve in a fiduciary capacity with control over the assets of another (for example, an executor of an estate or guardian of a minor) may need 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.