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Oklahoma Surety Bonds: Your Comprehensive Guide
For many businesses and individuals in the Sooner State, a surety bond is
a mandatory part of licensing, contracting, or court requirements. This comprehensive guide breaks down what an Oklahoma surety bond is, why you need one, the types available, and how to secure yours quickly and affordably.
What is an Oklahoma Surety Bond?
An Oklahoma surety bond is a legally binding contract among three parties that provides a financial guarantee of compliance with laws, regulations, or contractual terms. It’s essentially a promise backed by a surety company that financial damages will be covered if the bonded party fails to meet their obligations.
The three parties involved are:
- Principal: The individual or business required to obtain the bond (e.g., an auto dealer, contractor, or notary public).
- Obligee: The entity requiring the bond, usually a government agency (local, state, or federal) or a court. They are the party protected by the bond.
- Surety: The insurance company that issues the bond and guarantees the Principal’s obligations to the Obligee. Surety1.com is a surety bond broker and represents over a dozen surety companies.
Unlike insurance for the Principal, the surety bond protects the public and the Obligee. If the Principal causes financial harm due to negligence, misconduct, or a failure to perform, a claim can be filed against the bond. The Surety will investigate and pay valid claims up to the bond’s full amount, but the Principal is legally required to reimburse the Surety for all paid claims, including legal fees.
See our: What is A Surety Bond? Video
Key Types of Surety Bonds in Oklahoma
Surety bonds in Oklahoma fall into three main categories, though you’ll often hear them referred to by the specific profession or purpose they cover.
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Commercial Surety Bonds (License & Permit Bonds)
These are the most common type of bonds, required to secure a license or permit to operate a business legally within Oklahoma. They guarantee that the business will follow state and local laws specific to their industry.
| Type of Bond | Sample Bond Amount | Obligee |
|---|---|---|
| Motor Vehicle Dealer Bond | $25,000 | Oklahoma Motor Vehicle Division |
| Lost Stock Certificate Bond | Varies Based on Value of underlying Stock. | Stock's Transfer Agent |
| Mortgage Lender Bond | $100,000 | Oklahoma Department of Consumer Credit |
| Credit Services Organization Bond | $10,000 | Oklahoma Department of Consumer Credit |
| Marijuana Growers Bond | $50,000 | Oklahoma Medical Marijuana Authority (OMMA) |
| Money Transmitter Bond | Min $50,000 | Oklahoma Banking Department |
These bonds are essential for contractors and subcontractors working on public construction projects. They guarantee performance and financial obligations related to a contract.
- Bid Bond: Guarantees that the contractor will enter into the contract if they are awarded the bid.
- Performance Bond: Guarantees that the contractor will complete the project according to the contract’s specifications.
- Payment Bond: Guarantees that the contractor will pay subcontractors, suppliers, and laborers involved in the project.
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Judicial & Probate Bonds (Court Bonds)
These bonds are required by Oklahoma courts to guarantee that an individual or entity will fulfill specific duties as ordered in a legal proceeding.
- Fiduciary/Probate Bonds: Required for executors, guardians, administrators, and trustees who manage the assets of an estate or a minor/incapacitated person.
- Appeal Bonds: Required to suspend the enforcement of a judgment while the case is being appealed.
The Cost of an Oklahoma Surety Bond
The price you pay for your surety bond is called the premium, and it’s only a small percentage of the total required bond amount. The cost of most Oklahoma surety bonds is 1% to 3% of the bond amount, subject to a minimum premium and fees of $150.00. Surety1 represents over a dozen surety companies to find a competitive rate and terms.
How Premium is Calculated
Surety companies assess the risk they take on by underwriting a bond. The premium rate (the percentage of the bond amount you pay) is primarily determined by:
- The Required Bond Amount: The face value of the bond required by the Obligee.
- The Type of Bond: Some bonds (like low-risk notary or standard license bonds) are easier to secure than high-risk commercial or contract bonds.
- The Principal’s Financial Strength & Credit Score: For many types of bonds, this is the most significant factor. A strong personal credit score (typically 650+) indicates low risk, as it suggests the Principal is financially responsible and likely to reimburse the Surety for any claims.
Getting a Bond with Bad Credit
While many License and Permit bonds do not require credit check, some do. It is usually possible to get an Oklahoma surety bond with less-than-perfect credit. Surety1.com has access to programs for applicants with low scores. The premium will be higher (often 4% to 15% of the bond amount) to offset the increased risk, but this allows applicants to still meet their bonding requirements and operate legally.
How to Get an Oklahoma Surety Bond: A 4-Step Process
Step 1: Determine Your Exact Requirement
Before you apply, you must know the exact bond type and the required bond amount (penalty sum). This information is provided by the government agency (the Obligee) requiring the bond. If you are unsure, contact the Oklahoma licensing authority for your profession.
Step 2: Complete the Application
The application can typically be completed online in minutes. You’ll need to provide basic information, including:
- The required bond type and amount.
- Your name, address, and Social Security Number (for a credit check).
- Your business name and structure.
For smaller, low-risk bonds (like a Notary Bond), the approval is often instant. For larger or high-risk commercial/contract bonds, the surety company’s underwriter may require additional documentation.
Step 3: Receive Your Quote and Pay the Premium
Once your application is reviewed (often same-day), an agent from Surety1.com will provide a quote detailing the final premium cost.
- Review the no obligation quote.
- Sign some paperwork.
- Pay the premium online or over the phone.
Step 4: File the Bond with the Obligee
After payment, Surety1 will issue the official bond document (sometimes called the “bond form”). You will sign it as the Principal and then need to submit the original, signed document to the proper Obligee (e.g., the Oklahoma Secretary of State, the Motor Vehicle Division, or a local city licensing board) to finalize your license or legal requirement.
Need to Renew?
Many Oklahoma surety bonds are issued for a specific term (e.g., one or two years). The Surety1’s renewal department will contact you before expiration for a renewal for payment of the premium for the next term.
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.