Iowa Surety Bonds

Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Iowa surety bond needs.


Required Surety Bonds in Iowa

Typical Iowa bonds include (click on any for more info):

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Required Surety Bonds in Iowa

All surety bonds, including those issued in the state of Iowa, fall into one of three broad categories: construction and contractor bonds, license and permit bonds, or court bonds.

Iowa Construction & Contractor Bonds

This category includes all bonds that the state of Iowa and individual municipalities may require from companies bidding or working on public works projects. The most common Iowa construction and contractor bonds include bid bonds, performance bonds, and payment bonds.

Iowa License & Permit Bonds

One common requirement for becoming licensed at the state level to operate a particular type of business is the purchase of a surety bond. Licensing and/or permitting may also be required at the municipal level and, again, may require the purchase of a surety bond. A surety bond is a licensee’s guarantee to do business in a completely lawful and ethical manner.

Iowa Court Bonds

Iowa courts require surety bonds from people appealing a court decision, usually when property is contested or when a person is in charge of managing someone else’s money, such as the executor of an estate or guardian of a minor.

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Frequently Asked Questions

There are three parties to every surety bond agreement, which is a legally binding contract:

  • The “obligee” is the state or local agency requiring the surety bond.
  • The “principal” is the party required to purchase the bond.
  • The “surety” is the company underwriting and issuing the bond.
  • The obligee sets the required amount of the bond, which is the maximum amount that will be paid out on a claim. The obligee also spells out the conduct required of the principal in order to avoid claims against the surety bond.

Any party who suffers a financial loss because the principal has violated the terms of the bond has the right to file a claim against the bond. The principal is solely responsible for paying all valid claims.

However, the surety will often pay a claim and wait to be reimbursed by the principal. This ensures timely settlement of the claim and gives the principal some time to gather the necessary funds.

What the principal in a bond agreement actually pays for a surety bond is a small percentage of the required bond amount established by the obligee. That percentage, known as the premium rate, is determined by the surety company based on the applicant’s credit score and other indicators of the likelihood of claims being filed against the bond. Those with good credit can expect a rate of 1-3%. Those with poorer credit may pay a higher premium.
No claim against a bond will be paid until the surety company has investigated and determined that it is valid. After making payment to a claimant, the surety company will demand reimbursement from the principal.