Surety bonds are often an important part of doing business in Texas. Whether you are a contractor applying for a job, a business owner needing a license, or an individual meeting a court requirement, having the right bond in place can help meet state and local rules. At Castereno Insurance, we help people and businesses across Texas understand their bond options and connect with the one that fits their situation.
What Is a Surety Bond?
A surety bond is different from a standard insurance policy. Instead of protecting you from a loss, it serves as a financial guarantee that you will meet certain duties, follow regulations, or fulfill a contract.
A bond involves three parties:
- The Principal – The person or business needing the bond.
- The Obligee – The party requiring the bond, such as a state agency, local government, or client.
- The Surety – The company that issues the bond and ensures the obligation is met.
If the principal does not meet their obligation, the surety may pay the obligee and then seek repayment from the principal.
In short, a bond shows that you are financially accountable, which is why many Texas agencies and clients require one before granting a license or signing a contract.
Common Types of Surety Bonds in Texas
Here are some of the most common types of bonds people and businesses in Texas may need:
- Contractor License Bonds – Many Texas cities require contractors to have a bond before obtaining or renewing a license. This helps ensure compliance with building codes and local regulations.
- License and Permit Bonds – State and local agencies may require these bonds for certain industries, such as auto dealers or electricians, to show that the business will follow applicable laws.
- Performance Bonds – Often required in construction projects, these bonds provide a guarantee that work will be completed as outlined in the contract.
- Payment Bonds – These bonds help ensure that subcontractors, suppliers, and laborers are paid for their work on a project.
- Court Bonds – In some cases, Texas courts require bonds, such as probate bonds when handling an estate or appeal bonds during legal proceedings.
Depending on your industry or situation, other specialized bonds may also be available.
Who Needs a Surety Bond in Texas?
Many industries and roles in Texas require surety bonds. Some examples include:
- Contractors applying for permits or licenses in cities like Dallas, Houston, or San Antonio.
- Small business owners needing a license from the Texas Department of Licensing and Regulation (TDLR).
- Motor vehicle dealers applying for a General Distinguishing Number (GDN) license from the Texas Department of Motor Vehicles.
- Individuals involved in legal proceedings, such as probate or guardianship cases, where the court orders a bond.
- Companies bidding on public projects, where performance and payment bonds are often mandatory.
How to Get a Surety Bond in Texas
The process of getting a bond is generally straightforward:
- Identify the bond requirement. Confirm the type and amount required by the agency or contract.
- Apply for the bond. This usually involves a short application and, in some cases, a credit check.
- Pay the bond premium. Premiums are often a small percentage of the bond amount.
- Receive your bond. Some bonds can be issued the same day, while others may take longer depending on their size and purpose.
Why Work with Castereno Insurance
As an independent insurance agency in Texas, Castereno Insurance works with multiple companies that offer surety bonds. This allows us to review different options and help find one that meets the requirements set by your city, state agency, or client.
We take the time to listen to your needs and explain the process in clear terms. Whether you need a contractor bond in Houston, a court bond in Dallas, or a license bond in San Antonio, we are here to help make the process easier.
Get Started Today
If you are unsure which surety bond you need or are ready to apply, we are here to guide you. We can help clarify what is required and connect you with a bond that meets the right standards in Texas.
Taking care of your bonding and insurance needs now can help you stay focused on what matters most. Having the right coverage and bonds in place can help ensure that the things in life will be there for years to come.
Contact Castereno Insurance today to learn more about surety bonds in Texas and to get started.
