Massachusetts surety bonds are a contract legally binding the principle, oblige and a bond. Hence the surety promises to pay the obligee (the government or other entity requesting the bond) on behalf of the principal, in this case, the business owner. Therefore surety bonds act as a transfers risk from the obligee by compensating them.

The obligations include complying with Massachusetts laws about particular business licenses or construction contracts. Failure on the part of the principal to fulfill his obligation, the surety will pay the oblige thus resolving the dispute

How Do Massachusetts Surety Bonds Work?

Surety is a form of insurance to the obligee. The obligee can file a claim if the bond promise is not met. It’s like credit advanced to the principle which must be repaid back to the surety. You are supposed to abide by the terms of the bond or we can step into arbitrating and honor the claims.

As a surety firm, we require a signed indemnity agreement or the general agreement of indemnity by all owners personally. Consequently, indemnity agreement commits you and the corporate body to compensate the surety for any claims arising from your noncompliance with contractual obligations.

Getting Licensed and Bonded in Massachusetts

The license and permit bonds assure the principle will follow guidelines stated in a specific license. Any violation of the regulations can be caused by misrepresentation, fraud or late payment. The surety comes in to pay the obligee only when the principle violates certain terms and is unable to resolve them amicably.

For example, in the construction industry, the bond ensures the contractor fulfills his obligation as per the contract, or else the surety will compensate or take actions to remedy the situation as per the contract.

A Surety Bond Is Not Insurance for Your Business

There is a misconception that a surety bond is like the normal insurance between two parties. In reality, a bond is a public cover against violation of certain obligation by the principal, and the clients that you work for. Consider Massachusetts surety bonds as the necessary cost of conducting business with the government.

Companies should have a separate business liability coverage. This protects the business from operational threats and losses.

Difference Between Bonds and Insurance

Surety bonds:

  • Involve a three-party agreement
  • Guarantee performance of contractual obligation
  • Ensure compliance with the state of Massachusetts and US federal government regulations
  • Have a financial obligation to the surety (reimbursement)


  • Is a two-party agreement
  • Transfers the risk from an entrepreneur to the insurance
  • Comes with an expectation of claims to be paid
  • Requires both sides to uphold legal obligations to each other based on the contract

Types of surety bonds required in Massachusetts:

  • Contractor bonds – these bonds are for contractor type of projects like road or pavement maintenance, systems installations, lighting. These contractor bonds are in every state, county and municipality. They ensure contractors comply with codes and regulations. Additionally, they provide cover to people who hire contractors.
  • Court bonds – these bonds are ordered or required by the tribunals in Massachusetts for various purposes.
  • License and permits bonds – the surety bonds are needed by specific professions like mortgage brokers and auto dealers to operate legally in Massachusetts.
  • Auto dealer – it is one of the most common bonds in almost all states before a vehicles dealer is allowed to operate. The Massachusetts car dealer bond allows you to work legally in the state before a license is handed out.
  • Freight broker – this is a typical bond that a freight broker must get before they get licensed by the federal government regardless of the state they operate from.
  • Collection agency – a surety bond required to cover a debt collector owed to third parties. They guarantee that collection agencies (principle) account for all funds collected on behalf of the firm, or corporations. If the principal fails to meet the obligation, then the bond covers up for the financial losses.
  • Employment agency – it is a Massachusetts Executive Office of Labor and Workforce Development legal requirement for agencies and individuals who place workers in jobs to acquire this bond. The bond amount is $3,000 and ensures employment agencies comply with rules and laws. If an agency fails to fulfill the terms, the surety will pay harmed workers. In return, the employment agency will reimburse the surety for all damages.
  • Investment – this covers individuals who advise others on financial securities.

Others include:

  • Auctioneer
  • Liquor license
  • Private detective/watch guard
  • Real estate broker
  • Used auto dealer

How to Get Bonded in Massachusetts

The first step is to get the right bonding agency that serves your needs. It is also important to find out whether the surety firm specializes in writing bonds with fast service. After surety firm identification you will apply for approval. However, note that contractor and court bonds are difficult to obtain because of the stringent requirement of solid financial statements and personal credit.

We provide affordable Massachusetts surety bonds and fidelity bond insurance. Every Massachusetts surety bond is prepared on a specific Massachusetts bond form, as prescribed by the entity requiring the bonding (known as the obligee). Call us today, and learn how to get bonded in Massachusetts. We’ll answer any question you might have. Apply for your Massachusetts surety bond now by completing our online application. If you prefer, you can download an application to complete and email to our bond agency for processing. Below is a list of commonly requested surety types in Massachusetts.

  • Actors
  • Adjuster
  • Agent
  • Auction
  • Broker
  • Business
  • Car Title
  • Construction
  • Contractor
  • Court
  • Dealer
  • Federal
  • Fidelity
  • License
  • Mechanics Lien
  • Medicare
  • Mortgage Broker
  • Notary Public
  • Online Bond
  • Private Investigator
  • Process Server
  • SAG
  • Sales Tax
  • Defective Lost Title
  • Utility Deposit