Surety Bonds for Businesses and Contractors

When a contract, license, or permit requires a bond, MJM Global places it — clearly, quickly, and as part of your broader commercial risk program.

A Surety Bond Is Not Insurance — Here Is the Difference

This is the most common point of confusion, and it matters. A traditional insurance policy protects the policyholder against covered losses. A surety bond works differently: it is a three-party agreement in which the bonding company (the surety) guarantees to a third party — a government agency, project owner, or licensing authority — that you will fulfill a specific obligation. If you fail to perform, the surety pays the claim. You then owe the surety reimbursement.

 

In short, a bond does not indemnify you. It guarantees your performance or compliance to someone else. Understanding that distinction helps you know exactly what you are agreeing to before you sign.

The Bond Types Most Relevant to Our Commercial Clients

MJM Global places two categories of bonds that come up most frequently for the businesses we work with.

 

  • Contract and Performance Bonds: Required on construction and project-based contracts, these bonds guarantee that a contractor will complete the work as agreed and pay subcontractors and suppliers. They are a standard requirement on public projects and increasingly common on larger private contracts.
  • License and Permit Bonds: Required by state or local authorities as a condition of obtaining or renewing a business license, contractor's license, or operating permit. Common across industries including construction, auto dealers, mortgage brokers, and freight brokers.

 

If you are not certain which bond type your contract or agency is requiring, our team can review the requirement language with you and identify the correct bond before placement begins.

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Who Typically Needs a Surety Bond

Surety bonds are required across a wide range of industries and business types, and the obligation to carry one often arrives with little notice — tied to a contract award, license renewal, or permit application. Among the clients we work with most frequently are general contractors, subcontractors, real estate professionals, auto dealers, freight brokers, mortgage brokers, and any business operating under a government contract that specifies performance or payment bond requirements. 

Frequently Asked Questions About Surety Bonds

  • What is the difference between a surety bond and insurance?

    Insurance protects the policyholder against covered losses. A surety bond protects a third party — such as a project owner or licensing authority — by guaranteeing that you will fulfill a specific obligation. If a claim is paid under the bond, you are responsible for reimbursing the surety.

  • How do I get a surety bond for a contract?

    Start by reviewing the bond requirement in your contract or licensing documents to identify the bond type, the required amount, and the obligee (the party requiring the bond). From there, MJM Global handles the application and placement process with our surety markets. A single call is typically enough to get the process started.

  • How long does it take to get a surety bond?

    Many license and permit bonds can be issued within one to two business days once the application is complete. Contract and performance bonds on larger projects may require more underwriting time, particularly if financial statements or project documentation are involved. We will give you a realistic timeline at the outset so your project schedule is not at risk.

  • Does my credit score affect my ability to get bonded?

    For smaller bonds, particularly license and permit bonds, approval is often straightforward and credit requirements are minimal. For larger contract bonds, the surety will review your financial position, work history, and capacity. Our team works with multiple surety markets to find appropriate placement across a range of applicant profiles.

  • Can MJM Global place a surety bond if I already have my commercial insurance elsewhere?

    Yes. While we recommend consolidating your commercial program with one advisory team for consistency and efficiency, we are able to place bonds as a standalone service. We are happy to discuss your full program at the same time if you would like a second opinion on your existing coverage.