What Are License & Permit Bonds?
A license and permit bond is a type of surety bond that ensures businesses follow federal, state, and local regulations. These bonds:
- Protect consumers from fraud or misconduct
- Guarantee compliance with industry laws
- Are often required before a business can legally operate
How License & Permit Bonds Work
A license bond involves three parties:
- Principal — the business or professional
- Obligee — the government agency requiring the bond
- Surety — the company issuing the bond
If the business violates regulations, a claim can be filed against the bond to cover damages.
Cost of License & Permit Bonds
Many license bonds are issued instantly at approximately 1% of the bond amount.
$10,000 bond → about $100 premium
Some bonds require underwriting, where pricing depends on credit score and financial history. Even with lower credit, approval is often still possible at a higher rate.
Common License & Permit Bonds
Business & Financial Services
- Freight Broker Bond (BMC-84)
- Mortgage License Bond
- Money Transmitter Bond
- Investment Advisor Bond
- Collection Agency Bond
Construction & Trades
- Contractor License Bond
- Auto Dealer Bond
- Title Agency Bond
- Pest Control Bond
Professional Services
- Notary Bond
- Insurance Adjuster Bond
- Real Estate Broker Bond
- Private Investigator Bond
Specialty & Regulated Industries
- Travel Agency Bond
- Telemarketing Bond
- Health Club Bond
- Pharmacy Bond
- Waste Hauler Bond
These bonds vary by state and industry but all serve the same purpose — ensuring legal and ethical operations.
Do You Need a License Bond?
Most businesses that require a license will also require a bond. You may need one if you:
- Handle client funds
- Operate in a regulated industry
- Provide professional or financial services
Your state or licensing authority determines the bond amount and requirements.
How to Get a License & Permit Bond
- Identify your required bond
- Complete a short application
- Receive a quote (often within 15 minutes)
- Purchase and receive your bond
Many bonds are issued instantly with minimal paperwork.