South Dakota Surety Bonds

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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 South Dakota surety bond needs.


Required Surety Bonds in South Dakota

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

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Required Surety Bonds in South Dakota

Surety bonds are broadly categorized as construction and contractor bonds, license and permit bonds, and court bonds, with multiple bond types in each category.

South Dakota Construction & Contractor Bonds

South Dakota has its own version of the federal Miller Act. It requires construction contractors to purchase certain surety bonds before they can work on a public works project funded by the federal government. South Dakota’s “Little Miller Act” requires a performance and payment surety bond for the total amount of any state-level public works project. The project owner has the option of waiving that requirement for projects valued at less than $25,000.

South Dakota License & Permit Bonds

South Dakota’s Department of Labor and Regulation maintains more than 30 licensing boards and commissions that license and regulate specific occupations and professions. Some types of businesses require a license from another body. For example, auto dealers are licensed by the South Dakota Division of Motor Vehicles. In some cases, the licensing process requires applicants to purchase a license and permit bond to guarantee adherence to applicable laws and regulations.

South Dakota Court Bonds

South Dakota courts at any level can order the purchase of either an appeal bond or a probate bond. An appeal bond may be required in order to pursue an appeal of a previous court decision, especially if contested property is involved. A probate bond may be required from anyone named to serve in a fiduciary capacity, 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.