New contractor license applicants are often required to obtain a contractor surety bond, but many don’t fully understand how it works. This FAQ explains why contractor bonds are required, how much they cost, how claims work, and what new contractors need to know to get licensed without delays.

Surety bond claims can be concerning for auto dealers, but a claim does not automatically suspend or revoke your license. Most states are notified when a claim is filed, and repeated or unresolved claims may trigger a compliance review. Dealers are responsible for reimbursing the surety if a claim is paid, and failure to do so can affect future bond renewals and licensing. By responding quickly, resolving valid claims, and maintaining compliance, dealers can protect their lic

Auto dealers often switch surety bond providers to lower costs, avoid filing errors, and receive faster, more reliable service. Common reasons include better bond rates, quicker approvals, correct state filing, improved communication, and working with a surety bond specialist instead of a general insurance agent. Changes in credit, business structure, or poor past experiences also prompt dealers to switch.