Surety bonds in Texas can feel like the quiet backbone of many professions—small documents carrying large promises. And one of the first questions business owners and professionals ask is simple: how much is a surety bond in Texas? Whether you're a contractor bidding on a public project, a motor vehicle dealer licensed by the state, or a business required to safeguard customer funds, a surety bond acts as a financial handshake: a pledge that you’ll fulfill your obligations.
At Avla, we help businesses and professionals navigate these requirements with clarity, professionalism, and a touch of humanity. Let’s break down what a Texas surety bond is, what it costs, and how the process works—without the jargon fog.
What Is a Surety Bond in Texas?
A Texas surety bond is a financial guarantee required by a state authority (called an obligee). It promises that a business or professional will follow the rules that govern their industry.
A surety bond is not insurance for the purchaser—instead, it protects the public, clients, or the state. And importantly, a commercial bond is not the same as commercial insurance. Insurance protects you; a bond protects others from potential financial harm caused by your actions.
Surety bonds in Texas come mainly in two categories:
Contract Bonds
These include bid bonds, performance bonds, payment bonds, maintenance bonds, and combined performance & payment bonds. They are widely used in construction to guarantee contract fulfillment.
Commercial Bonds
These include:
- License and permit bonds (like contractor license bonds or motor vehicle dealer bonds)
- Court, judicial, and fiduciary bonds
- Public official bonds
- Miscellaneous commercial bonds
All these bond types share the same purpose: ensuring accountability and compliance.
How Much Is a Surety Bond in Texas?
The cost of a Texas surety bond is usually a percentage of the total bond amount. Think of it like renting a promise—you pay a small fraction to unlock the full protection of the guarantee.
Typical Cost Range
Most Texas surety bonds cost 1% to 10% of the bond amount, though some low-risk applicants may pay less—sometimes as low as 0.5% to 3%.
For example:
- A $10,000 bond may cost between $100 and $1,000.
- A $50,000 bond may cost $500 for excellent credit or $5,000 for poor credit.
- A Texas Notary bond has a flat rate of $50 for the required four-year term.
What Determines the Price?
A few main factors shape your premium:
- Credit score: Strong credit often leads to lower premiums (1–3%), while challenged credit can mean 4–10%.
- Bond amount: The higher the bond limit, the higher the total cost.
- Risk level of the bond type: A contractor license bond, for example, carries more risk than a notary bond and is priced accordingly.
- Years in business: A stable operating history can help lower your cost.
Simple Bonds vs. Underwritten Bonds
Some Texas bonds—particularly smaller license and permit bonds—can be issued instantly with no credit check.
Others require deeper underwriting, especially:
- bonds over $100,000,
- contract bonds, or
- bonds guaranteeing strict financial performance
That may include reviewing financial statements, verifying assets, analyzing business performance, and, in rare cases, requesting collateral or a co-signer.
This is where working with an experienced surety bond company as a partner becomes invaluable. At Avla, we match each applicant with financially strong, fully authorized surety providers to secure the best pricing available for their situation.
The Most Common Texas Surety Bonds
Texas has a wide range of industries and regulatory bodies requiring surety bonds. Some of the most common include:
Motor Vehicle Dealer Bonds
Anyone buying, selling, or trading vehicles in Texas must secure this bond through the Texas Department of Motor Vehicles. It reinforces ethical sales practices and protects customers from financial harm.
Contractor License Bonds
Cities and local authorities across Texas often require contractors to post a license bond before they begin working. This bond isn’t the contractor themselves—it’s the financial promise that the contractor will follow local laws, meet code requirements, and complete work responsibly.
Title Bonds
When a vehicle’s title has been lost, damaged, or is otherwise missing proper documentation, a title bond helps the owner register it legally. It serves as a safeguard in situations where clear ownership cannot be immediately confirmed.
Freight Broker (BMC-84) Bonds
Freight brokers operating from Texas must comply with federal regulations, which include posting a BMC-84 bond. This ensures they handle cargo and payments with integrity.
Public Adjuster Bonds
Anyone charging a fee to negotiate insurance claims on behalf of policyholders must provide this bond through the Texas Department of Insurance. It protects the public from dishonest or improper claim handling.
Notary Bonds
Texans commissioned as notaries must hold a notary bond—an assurance that they will perform notarizations ethically and in accordance with state law.
Alcoholic Beverage Commission Bonds
Businesses working within the state’s alcoholic beverage industry may need one or more bonds required by the Texas Alcoholic Beverage Commission. These support compliance with industry rules and safeguard state revenues.
Mixed Beverage Gross Receipts Bonds
Issued through the Texas Comptroller, this bond is commonly required for establishments that sell mixed beverages. It guarantees proper reporting and payment of taxes tied to drink sales.
Texas Surety Bond Requirements
They vary by industry, but they all share one fundamental purpose: to protect the public. When an obligee sets a bond amount, they’re defining the maximum financial protection available if a claim is made.
A few things every applicant should know:
- You must select a licensed and financially sound surety company to issue the bond.
- The bond must meet the exact amount and wording required by the authority.
- The bond must remain active and in good standing, or your license or operation could be suspended.
- A bond claim must be repaid to the surety by the bonded party, since the surety is essentially extending you credit.
Ready to Get Your Texas Surety Bond?
Whether you're launching a new business or renewing a required license, understanding how much a surety bond is in Texas empowers you to plan confidently and stay compliant.
Avla is here to make the bonding process simple, transparent, and fast. Think of us as your guide across the bridge of compliance—steady, knowledgeable, and ready to support you every step of the way.
Start your Texas surety bond quote with Avla today and experience professional service with clarity and care.
