Rhode Island
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A Rhode Island surety bond is a contract that legally binds three parties to an agreement.
The three parties involved are the surety firm, the principal, and the obligee. The surety is a company that processes the bond. The person or organization that applies for the bond is the principal. The obligee is the party that requests the bond. It gives a guarantee that the principal will stick to the terms of the contract.
If the principal fulfills the requirements of the bond, the process ends. However, if they default, the procuring entity writes a contract cancellation notification to them. The contractor should address the non-performance in ten days. If they still fail, the contract is canceled. Moreover, any other subcontract may be cancelled. Additionally, the state may bar them from bidding in the future.
Common Rhode Island Surety Bonds
A Rhode Island surety bond is a contract that legally binds three parties to an agreement.
The three parties involved are the surety firm, the principal, and the obligee. The surety is a company that processes the bond. The person or organization that applies for the bond is the principal. The obligee is the party that requests the bond. It gives a guarantee that the principal will stick to the terms of the contract.
If the principal fulfills the requirements of the bond, the process ends. However, if they default, the procuring entity writes a contract cancellation notification to them. The contractor should address the non-performance in ten days. If they still fail, the contract is canceled. Moreover, any other subcontract may be cancelled. Additionally, the state may bar them from bidding in the future.
Common Rhode Island Surety Bonds
Auto Dealer Bond
Contractors Bond
Freight Broker (BMC-84) Bond
Collection Agency Bond
Employment Agency Bond
Telemarketing Bond
How do I purchase a Rhode Island surety bond?
NFP, the nation's largest and most reliable surety company, is authorized to issue many different types of surety bonds in Rhode Island. We can provide the best rates for your bond, as well as the fastest issuance, to get your business off and running.
Our short online application makes it easy. Click below to start the application process today.
Rhode Island Surety Bond FAQs
In Rhode Island, a variety of professionals and businesses must be bonded to comply with state laws. This includes auto dealers, contractors (especially those working on public projects), notaries, freight brokers, and collection agencies. These bonds help ensure ethical practices and protect the public from financial harm.
Bond amounts vary by profession. For example, auto dealers must post a $50,000 bond, freight brokers need a $75,000 bond, and contractors may require bonds ranging from $10,000 to $20,000. Costs usually range from 1 to 10% of the bond amount annually, depending on credit and risk profile. A $20,000 contractor bond might cost between $200 and $2,000 per year.
Rhode Island follows a version of the “Little Miller Act,” which requires contractors working on public projects over $50,000 to obtain performance and payment bonds. These bonds typically cover 50 to 100% of the contract value and serve to protect the state and project owners from non-performance or unpaid labor and materials.
Yes. While credit history affects your premium, most applicants can still obtain a bond. Individuals with excellent credit might pay 1 to 3% of the bond amount, while those with average or poor credit may pay 4 to10%. Options such as premium financing, collateral, or co-signers are often available to help secure approval.
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