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Essential Guide to Arkansas Surety Bonds: Licensing, Costs, and How to Get Bonded
If you’re a professional, business owner, or contractor in the “Natural State,” you may be required to obtain an Arkansas surety bond to legally operate. These bonds are essential financial guarantees that protect the public and ensure compliance with state laws and regulations.
This guide breaks down what Arkansas surety bonds are, the most common types, their costs, and a simple process for securing yours.
What is an Arkansas Surety Bond?
An Arkansas surety bond is a three-party agreement that guarantees a party (the Principal) will fulfill a contractual or legal obligation to another party (the Obligee). If the Principal fails to meet their obligations and causes financial harm, the bond provides financial protection for the Obligee and the public.
It’s crucial to understand the three parties involved:
- Principal: The individual or business purchasing the bond (e.g., a contractor, auto dealer) who must act ethically and legally.
- Obligee: The entity requiring the bond, usually a government agency in Arkansas (e.g., a licensing board, city, or county).
- Surety: The insurance company or bond provider that issues the bond and guarantees the Principal’s obligations. The Surety pays the Obligee for valid claims, but the Principal is legally required to reimburse the Surety for the full claim amount.
See our What is a Surety Bond Video
Common Types of Arkansas Surety Bonds
Surety bonds in Arkansas generally fall into a few major categories, with specific bonds required for various industries and situations:
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License and Permit Bonds (Commercial Bonds)
These are mandatory for many professionals to obtain or maintain a state or local license/permit, ensuring they comply with all relevant laws.
| Bond Type | Purpose & Common Obligee |
Appraisal Management Company Surety Bond |
The Arkansas Appraisal Management Company Surety Bond is required by the Arkansas Appraiser Licensing and Certification Board. The bond is required to be in the amount of $20,000 |
Auto Dealer Bond |
Required for new and used motor vehicle dealers (often a $25,000 bond) to protect customers from fraudulent practices. |
Money Transmitter Bond |
$50,000 surety bond required by the Arkansas Securities Department |
Mortgage Broker Bond |
Required by the Securities Department for professionals engaged in mortgage services. |
Collection Agency Bond |
Required for agencies that collect outstanding debt for clients. |
Export to Sheets
Required in the construction industry, particularly for public works projects, to guarantee that a contract will be completed according to its terms.
- Bid Bonds: Guarantees the Principal will enter into the contract if awarded the bid.
- Performance Bonds: Guarantees the Principal will complete the project according to the contract specifications.
- Payment Bonds: Guarantees the Principal will pay all suppliers and subcontractors.
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Court and Probate Bonds
Required by the courts to ensure a party acts faithfully and legally within a legal proceeding.
Probate Bonds: Required for fiduciaries like estate administrators or guardians to ensure they manage assets honestly.
Appeal Bonds: Allows a party to appeal a court decision while guaranteeing the original judgment will be paid if the appeal fails.
Arkansas Surety Bond Cost and Requirements
The cost of your Arkansas surety bond is a small fraction of the total bond amount (the maximum liability the surety covers). This payment is called the premium.
Cost (Premium Rate)
Your premium is typically a percentage of the total bond amount and is primarily determined by:
Bond Type: Some bonds, like the $10,000 Commercial Contractor Bond, can be issued instantly for a fixed, low price (e.g., $150 to $250 for a multi-year term).
Personal Credit Score: This is the most significant factor for some bonds.
Good Credit: Applicants usually pay the lowest rates, often 1% to 3% of the bond amount.
Lower Credit: Applicants are considered higher risk and may pay a higher rate on some bonds, typically 4% to 10% of the bond amount. Surety1 has several markets for high risk bonds.
Financial Strength: For high-value bonds (like some contract bonds), the surety may review business financials and other assets.
Key Requirements
The basic process for obtaining a bond typically requires:
A completed surety bond application.
A credit check (for most commercial bonds).
The required bond amount (set by the Obligee).
For larger or more complex bonds, the surety may require financial statements, business licenses, or prior work experience.
How to Get Your Arkansas Surety Bond in 4 Steps
Securing your bond is a straightforward process when working with an experienced surety provider.
Step 1: Determine the Required Bond
Before applying, confirm the exact bond type and amount required by the Arkansas state agency, local government, or court (the Obligee).
Step 2: Apply for a Quote
You can typically apply for most Arkansas bonds online. You’ll submit a short application with your personal and business information. This allows the surety to perform a soft credit check and calculate your premium.
Step 3: Receive Your Quote and Pay the Premium
A Surety1.com agent will provide a quote based on your application and credit profile. Once you accept the quote and pay the premium, your bond is issued. No one pays the full bond amount upfront; you only pay the premium.
Step 4: Sign and File the Bond
Surety1.com will issue the official bond form, often including a Power of Attorney. You must sign the bond and then file the original, signed document with the correct Arkansas obligee (e.g., the Contractors Licensing Board, Department of Finance and Administration, or Secretary of State).
FAQs about Arkansas Surety Bonds
Q. Do I need a surety bond to be a contractor in Arkansas?
Yes, most Commercial Contractors and Commercial Registered Subcontractors must file a $10,000 surety bond with the Arkansas Contractors Licensing Board. Residential roofers have an additional $15,000 bond requirement.
Q. How long does an Arkansas surety bond last?
Most commercial and license bonds have a term of one year and must be renewed annually. Some sureties offer multi-year terms (e.g., 2 or 3 years) for a discount.
Q. Is a surety bond the same as insurance?
No. Standard insurance protects you from loss. A surety bond protects the public (the Obligee) from your misconduct. If a claim is paid, you (the Principal) are legally obligated to repay the Surety for the full amount.
Can I get an Arkansas surety bond with bad credit?
Yes. Surety1 has access to several bond programs for those with challenged credit. While your premium rate may be higher due to the increased risk, poor credit will not prevent you from obtaining most types of surety bonds.
About Surety1.com
Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.
Surety1 was founded in 2003 and helps thousands of clients find the best prices on their surety bonds. We take pride in our work so that we can give you great service. Learn more about Surety1.