License and permit bonds: find the amount, estimate the premium
Enter the bond amount your license or permit requires and your credit score: the yearly premium range published grids give appears at once.
License bond premium
$150 to $300
estimated, per year, for a $20,000 bond
| Bond amount you entered | $20,000 |
| Rate for credit 700 or higher | 0.75 % to 1.5 % a year |
| Term | 1 year, renewed yearly |
Estimate from published rate grids, not a quote.
Compiled by Radif Partners · Method and sources · rules read October 22, 2026
A license and permit bond is any surety bond that a government requires before it grants a license or a permit: auto dealers, contractors, mortgage brokers, collection agencies, auctioneers, pawnbrokers, sellers of travel, telemarketers, alcohol and tobacco sellers, medical equipment suppliers and hundreds more. The agency that issues the license sets the amount in its statute or rule; this site reads 36 such rules for notary, dealer, contractor and title bonds, and the federal $50,000 bond for Medicare equipment suppliers. For any other license, enter the amount your agency states. The premium is a yearly percentage of that amount, set mostly by the owner's credit: on published grids, 0.75 to 1.5 percent with a score of 700 or more, 2.5 to 5 percent between 600 and 649. A $20,000 bond therefore costs about $150 to $300 a year with good credit, with a minimum of $100.
Why governments require them
A license tells the public that a business may operate. A bond gives the public a way to be paid if the business breaks the rules attached to that license. Instead of running its own fund, the state requires each licensee to find a surety willing to stand behind it. Consumers harmed by fraud, unpaid taxes owed to the state, or customers left without the service they paid for can claim on the bond.
The bond also screens applicants. A surety will not guarantee someone it expects to default, so the bond requirement filters out operators with poor records before the agency even reviews the application.
Where to find your amount
The amount is in the law or rule that creates the license, and the agency usually prints it on its application checklist. Search the agency's site for "surety bond" with the license name, or read the bond form, which states the penal sum. Some amounts are fixed, like the $50,000 Texas dealer bond. Others depend on volume, like Arizona's contractor bonds, or are set case by case, like Nevada's. Federal licenses have federal amounts: $50,000 for Medicare equipment suppliers, $75,000 for freight brokers.
Premium for the amount your agency sets
License bond premium
$100 to $250
| Bond amount you entered | $10,000 |
| Rate for credit 650 to 699 | 1 % to 2.5 % a year |
| Term | 1 year, renewed yearly |
How the premium is set
Sureties sort license bonds into risk classes. Low-risk bonds, such as many permit bonds for city work or small business licenses, are often sold at a flat price with no credit check. Standard license bonds, the large majority, are rated on the owner's personal credit using the grid below. High-risk bonds, where claims are frequent, start higher regardless of credit.
| Credit score | Yearly rate | On $10,000 | On $50,000 |
|---|---|---|---|
| 700 or higher | 0.75 to 1.5 % | $100 to $150 | $375 to $750 |
| 650 to 699 | 1 to 2.5 % | $100 to $250 | $500 to $1,250 |
| 600 to 649 | 2.5 to 5 % | $250 to $500 | $1,250 to $2,500 |
| 550 to 599 | 5 to 10 % | $500 to $1,000 | $2,500 to $5,000 |
| Under 550 | 5 to 15 % | $500 to $1,500 | $2,500 to $7,500 |
Forms and wording
Agencies are strict about the bond form. Most publish their own, with the exact wording, the obligee's name and the signature blocks; some require notarized signatures or an original with a raised seal. The surety must be licensed in the state, and the bond must carry the power of attorney of the agent who signs for it. A bond on the wrong form or with the wrong name is returned, which delays the license.
Claims and their cost to you
A claimant files with the surety, which asks the licensee to respond. The surety pays only claims it finds valid, up to the bond amount, and then seeks reimbursement from the licensee and the indemnitors who signed. A paid claim also makes renewal harder: the surety may raise the rate, demand collateral or decline to renew. Resolving complaints directly with customers before they become bond claims protects both the license and the bond price.
Several licenses, several bonds
A business licensed in several states or cities usually needs a bond for each license. A car dealer with lots in two states files two dealer bonds; a contractor working in several cities may add local permit bonds on top of a state license bond. Some agencies accept one blanket bond for several locations; most do not. The surety bond cost page shows how to estimate several bonds at once by credit tier.
Common licenses that require a bond
The list is long and varies by state, but the same trades come back everywhere. Motor vehicle dealers and contractors are bonded in most states. Mortgage brokers, lenders and loan originators post bonds with the state banking or financial regulator, often graded by loan volume. Collection agencies, money transmitters and check cashers are bonded because they hold other people's money. Sellers of travel, health clubs and private schools that take payment in advance are bonded in some states so customers can recover prepayments. Alcohol distributors, fuel distributors and tobacco wholesalers post tax bonds that guarantee the excise taxes they collect. Auctioneers, pawnbrokers, private investigators, employment agencies and telemarketers complete a long list. At the federal level, suppliers of durable medical equipment to Medicare and freight brokers have fixed amounts. Each of these has its own form and amount, set by the agency that issues the license.