Surety Bonds in Texas
You have been told you need a bond, whether for a contract, a license, or a court, and you want a straight answer from a Texas office. We place contract bonds and license and permit bonds, and we can look into other bond requests.
What is a surety bond?
A surety bond involves three parties. You, the business getting the bond, are the principal. The surety company backing the bond promises the obligee, the agency, city, court, or client that required the bond, that you will meet the obligation.
The Texas Department of Insurance describes the arrangement as the surety standing behind the principal's performance to the obligee, with a statute, law, or ordinance usually setting the requirement. A bond is not insurance that protects your business. It protects the obligee, and if the surety pays a claim, your business is expected to pay the surety back.
Does Texas require a surety bond?
The Texas Department of Insurance notes that a bond is usually required by a statute, law, ordinance, or contract, not by one single rule that covers every business. Whichever agency, city, county, court, or contract you are dealing with sets the requirement and tells you what is needed.
Public construction work is one clear example. Texas Government Code Chapter 2253 requires a performance bond and a payment bond on Texas public works contracts above a set dollar threshold, and a private contract or bid package can ask for the same kind of bond even when the law does not.
License and permit bonds work the same way: a Texas agency, the Secretary of State, or a city or county may require one before issuing a license or letting a business operate. Two examples make the pattern concrete. Texas Government Code Chapter 406 sets the notary public bond at $10,000, and Texas Transportation Code Section 503.033 requires a bond for a motor vehicle dealer or wholesale auction license.
The Texas Department of Licensing and Regulation requires this kind of financial security for a few specific programs: professional employer organizations, hearing instrument fitters and dispensers, and combative sports promoters. A court can require a bond too, for a role such as an estate executor or a guardian, set by the judge handling that case.
Source: Texas Department of Insurance Bond Resources, Texas Government Code Chapter 406, Texas Transportation Code Section 503.033, Texas Government Code Chapter 2253, and Texas Department of Licensing and Regulation, read September 7, 2026.
What kinds of bonds does the office help with?
Here is how we think about a bond request, from the most common kind to the ones we look into case by case.
Contract surety bonds
Bid, performance, and payment bonds for construction and service work, the kind a contract or a bid package can require. Tell us about the job and the bond the other party is asking for.
License and permit bonds
A bond a Texas agency, city, or county can require before it will license or permit your business. Bring us the requirement and we will tell you whether we can place that specific bond.
Court and fiduciary bonds
Probate, guardianship, and similar bonds a court orders in a specific case. Bring us the order and we can look into whether it fits our current bond relationships.
Other commercial bonds
A bond that does not fit the categories above. Bring it to us and we will tell you what is possible.
What a bond does not do for your business
- Protect your own property or equipment. Bring that to us as a separate coverage conversation.
- Cover the business's liability on the job itself. If the contract also calls for liability coverage, bring that to us alongside the bond request.
- Cover the vehicles or the people working the job. Commercial auto and workers compensation are separate policies, so bring those details to us too.
How does your office handle a bond request?
A licensed team member reviews the requirement and the obligee's wording before anything is quoted. The obligee, the party asking for the bond, often wants specific language, and the bond has to match what they ask for.
For a license or permit bond, that review is often simple since the request can move on an application alone. A contract bond, especially for larger work, takes more: the contract itself, and often financial statements and the business's history.
Not every bond is available to every business. The surety company decides on the request, the record behind it, and the wording the party requiring the bond asks for.
Bring what you have
- 01The requirement letter or contract that calls for the bond
- 02The bond form the obligee wants, if they gave you one
- 03Your business details
legal name, entity type, and years in business
- 04Financial statements, for a larger contract bond
- 05The license or permit details, for a license or permit bond
What does a bond cost in Texas?
What a bond costs depends on the bond type, the bond amount, and your credit and financial picture. A larger or riskier bond usually asks for a closer look at your finances.
Because every request is different, we cannot post a number that would fit every situation. A licensed team member reviews your specific bond request and explains the cost before you sign anything.
Before you compare the price
- Bond amount and form
Make sure every option is for the exact bond amount and form the obligee asked for.
- Full cost, not a rate alone
Ask for the total cost for the bond term, not just a rate.
- Length of the bond term
Compare how long the bond stays in effect, since some renew yearly and others cover a single job.
- What happens if declined
Ask what your options are if one surety company will not write the bond, since another may still be able to.
Business types with a page of their own
- Trucking Companies
- Churches
- Horse Owners and Equine Businesses
- Self Storage Facilities
- Auto Repair Shops
- Daycares and Child Care Centers
- HVAC Contractors
- Oil and Gas Operators and Contractors
- Plumbing Contractors
- Electrical Contractors
- Painting Contractors
- Flooring Contractors
- Landscaping and Lawn Care
- Restaurants and Cafes
- Salons and Barber Shops
- Photographers
- Medical Offices
- Business insurance by industry
Common questions from Texas business owners about surety bonds
Is a bond the same as insurance?
No. A bond protects the party that requires it, and if the surety company pays a claim, your business is expected to pay it back. Insurance works differently: it can help pay for a covered loss to you or a claim against you, without that kind of payback.
How fast can I get a bond?
It depends on the bond type and how complete your request is. A license or permit bond can sometimes move on an application alone, while a larger contract bond takes longer to review, so starting early gives you more room before a deadline.
What if my credit is not great?
Credit is one factor the surety company weighs, along with the bond type, the amount, and your overall financial picture, but it is not the only one. Bring us your situation and we will tell you honestly what looks possible.
Do I need a bond, insurance, or both for this job?
Many jobs ask for both: a bond for the obligee's protection and insurance such as general liability or commercial auto for your own exposure. Send us the requirement or the contract and a licensed team member will sort out what applies.
I was asked to show I am bonded and insured. What does that mean?
The party asking usually wants proof that a bond and one or more insurance policies are in place, often as a certificate or a copy of the bond. Bring us the request and we can tell you what you already have and what still needs to be arranged.
Who do I call if the bond is tied to a bid date?
Call the Madisonville office as soon as you know a bond is required, so a licensed team member has time to review it before the date arrives. Starting early protects a tight bid date more than any promised turnaround could.
What if the party asking for the bond has a specific form or wording?
Send it to us exactly as you received it. The bond has to match what the obligee asked for, so the exact form and wording matter before anything is issued.
Ready to start your bond request?
Send us the requirement or the contract that calls for the bond, and a licensed team member will take it from there. We will tell you plainly what we can do and what we still need from you.
A website request does not bind, change, cancel, reinstate, or confirm coverage.