License and Permit Bonds: What to Know

You should make sure that before you start applying for the license & permit bonds that you know which type you would require. There are numerous businesses that would be required to get these, so you should do the research to figure out whether or not your state requires one. These protect the consumers by ensuring that the business is following all of the regulations and rules. If they aren’t, then the consumer can file a claim against this.

Types

There are numerous types of license & permit bonds that you might need to get depending on what type of company you are running. Some of the businesses that need them to include the following:

·        Contractors

·        Motor vehicle dealer

·        Collection agencies

·        Freight brokers

·        Money transmitters

·        Notary public

If you are working in any of these areas, then you should ensure that you have the right coverage for your need. This would be there to cover individuals in case anything happens so that you don’t need to pay out of your pocket. Ask the experts if you are in doubt of whether or not you would require one and if so, which type you would need to apply for.

Coverage Amount

Depending on what type of license & permit bonds you get there are different coverage amounts and everyone is wondering how much they would have to pay. This really depends on the state that you are going to be working in and how much coverage you want. Most often you can get the coverage for around 1% of the full amount that you want to be covered for, but it also depends on your credit score. If you have bad credit, then you might have to pay out more for the coverage, which can go up to 15% of the amount.

Not Insurance

Another thing that you should understand when it comes to license & permit bonds is that they aren’t in lieu of insurance. If a business wants to be fully covered, then they would have a bond, insurance, and the required licenses. The bond means that they were evaluated by a firm and were issued with one based on their work experience as well as credit history. Make sure that you understand that this isn’t insurance, which means that you would need to get that separately to cover you for everything else.

Coverage Factors

Also, when it comes to getting your license & permit bonds there are a few factors that the surety firm is going to look into. Not only are they going to pull up your credit score to help determine how much of a percentage you would need to pay, but there are other things as well. Some of the other things that they look at include:

·        Former or pending lawsuits

·        Bankruptcy filings

·        Former work experience

·        Status of any previous bonds

Make sure that you know just what they are going to be looking at so that you are prepared.

There is a lot that you would need to know when it comes to license & permit bonds, including the various types that you can get. Also, you should know how much you would need to pay for one so that you have the money set aside. It is also important that you understand that this isn’t the same as insurance, which means you also need to get that. You should also know the various factors that the firm is going to look into when it comes to coverage, such as your credit score, work experience and much more.