How much do surety bonds cost?

Bond premiums vary greatly depending on the applicant, the bond type, surety, and the obligee. Just like other forms of credit, everyone does not receive the same rate. Surety rates are typically anywhere from 1-3%.The lesser the risk the lower the rate.

Why do I need a surety bond?

Simply because a government authority or private entity is requiring the bond in order for you to operate. The bond ensures you will follow their guidelines.

Who is the obligee?

The obligee is whoever is requiring the bond of you. You are not the obligee. For example, the obligee for a contractor would be whoever they are doing the work for. The obligee for a license bond (e.g. auto dealer or mortgage broker) would be whoever they are filing their license with.