• Frequently Asked Questions

    1 . What is a surety bond?

    Surety bonds, while issued by an insurance company, are not insurance. A bond is a third party contractual obligation between the surety, the principal, and the obligee. It is an obligation by the surety to provide financial benefit to the obligee (the entity to whom the bond is issued) on behalf of the principal (this is you. . . the party responsible for completion of the obligation established by the bond). The bond ensures that the conditions or award of money damages will be fulfilled

    2 . What if I have bad credit?

    Not a problem. Unfourtuantly, sometimes market conditions are such that we come across this situation with our clients. The Wilstead Agency has relationships with a wide variety of surety companies where your bond can be placed.  We have special programs geared to handle bad or adverse credit applications. We work hard for each client regardless of issues which might make it difficult to approve a bond request.  For clients with credit history challenges, we are able to meet your bond needs through a our non-standard surety markets and in some cases we can place them in our standard programs.  Please keep in mind for a high-risk, or bad-credit bond, the cost is generally higher.

    3 . How much are bond premiums?

    We understand our clients want the most for their money.  At The Wilstead Agency, we have done our very best to keep the premiums as competitive as possible.  Being a "bonds only agency" we have develpoped strong relationships and special programs with out surety companies. To help you make an informed decision on the cost of your bond, we have provided a handy Bond Premium Calculator (LINK HERE).

    In general, commercial bonds through a standard risk market will be between 1% and 5% of the bond amount.  Court and legal bond premiums are about the same.  For high-risk bonds, the price will range from 10% to 20% of the bond amount.  For some bonds there is a minimum charge, regardless of the bond amount. Whatever the case, we offer nationwide competitive rates to satify your bonding needs for the lowest possible price.

    Contract bonds are priced based on the size of the job to be bonded.  Generally, bonds under $500,000 will have a premium of 1% to 3% of the dollar amount of the bond.  For jobs over $500,000, it is a graduated rate, and the larger the bond, the smaller the premium is, on percentage basis.  Again, our handy Bond Premium Calculator (LINK HERE) is a great tool to give you a good idea of the cost of your bond.

    4 . How long does it take to get a bond?

    Many bonds can be issued through our instant issue appliction process, or in other words, same day. All other commercial and court bonds are issued within a a day or two of when The Wilstead Agency receives your request, depending upon your qualification. Smaller contract bonds can usually be issued within a a few days, as well.  For larger contract bonds, there is a variety of financial data for the company and its owners that has to be submitted and reviewed. In most instances, however, that process takes about one week, some times slightly longer depending on the complexity of the project, the size of the job, and the amount of financial data submitted.

    Once your bond is approved it is issued immediately, and shipping is available to deliver it to you the very next business day!

    5 . If the surety company requires collateral to secure my bond, what are acceptable types of collateral?

    In the rare instance that collateral is required, most surety companies will require a cashier’s check on deposit with them, a CD at a bank, or a letter of credit from an approved financial institution to secure a bond.  Typically collateral is required only when the client presents a high-risk, or when the type of bond requires it.

    6 . How long is a bond good for?

    Most commercial bonds are good for 1-3 years, but can vary depending on the bond type. Court bonds are effective for as long as is necessary, as determined by the court in whose jurisdiction the bond is issued.  Contract bonds (bid, performance, and payment) offer coverage during the duration of the construction project, per the contract, for which they are issued. Sometimes a contract will require a longer warranty and in this case the contract bond will extend it's coverage.