A business bond is typical for a company that deals with contract services. This form of insurance, which also is known as a surety bond, ensures customers that if the vendor is not able to fulfill contract obligations the client still will be paid. There are several types of bonds, which include performance, license, payment, bid and indemnity; however, bonds are not insurance policies. If you are interested in gaining a bond for your business in Texas, you must follow several steps.
Determine the type of bond and bond amount your business requires. JW Surety Bonds, AAA Surety and South Coast Surety Insurance Services, Inc. offer a list Texas surety bonds based on business types. For example, a Texas collection agency is required to have a $10,000 bond.
Contact the Texas state department that is requiring a bond. For example, if you must bond a health spa, then you must contact the Texas Secretary of State to obtain the specific bond application for this type of business. Always contact the regulating department in Texas prior to contacting a surety bond agency to ensure you meet all requirements and you fill out the proper paperwork.
Locate a surety bond agency within your city or contact a statewide surety bond service, such as one of the three aforementioned surety bond services listed in Step 1. You will be required to fill out a bond application. The information required within this application will vary according to the type of bond you’re requesting; however, some information you can expect to provide the bonding agency include personal financial statements, business financial statements, business owner resume, certificate of insurance, assets, sources of income and state-issued licenses. This bond application differs from state department paperwork.
Submit all required documentation and application to the bonding agency. Once your bond is approved, you must sign the original bond and submit the signed bond to the Texas state department that regulates your type of business. For example, once your health spa has received its required bond, you must mail the original signed bond to the Texas Secretary of State.