$25,000 Texas Business Opportunity Seller Bond

Businesses are required to file a $25,000.00 bond with the State of Texas Secretary of State (the "Obligee") to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from a licensed business breaking licensing laws.

Business Opportunity Seller Bond

State/Jurisdiction:
Classification:

How much does the Texas Business Opportunity Seller bond cost?

Texas Business Opportunity Seller bonds typically cost between $250 and $1,250 depending on the personal credit, license history, and experience of the business owners and the surety carrier issuing the bond.

Credit Premium Rate Bond Cost
1.00% $250
1.50% $375
3.00% $750
3.75% $937.50
5.00% $1250

Is a Credit Check Required for Texas Business Opportunity Seller Bonds?

Surety carriers will run a credit report as part of underwriting the bond because the business ultimately must reimburse the surety bond company for any claims made on the bond.

Why is the Texas Business Opportunity Seller bond required?

Businesses are required to purchase and file a $25,000 bond with the State of Texas Secretary of State to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from the failure of a licensed business complying with the provisions of licensing laws.

How does the Texas Business Opportunity Seller bond work?

Texas Business Opportunity Seller bonds must be issued by an insurance carrier admitted by the Texas Department of Insurance. The insurance company issuing any surety bond, such as the Texas Business Opportunity Seller bond, will also be referred to as the "surety company" or the "bond company". The business is referred to as the Principal, the surety bond company as the Obligor and the State of Texas Secretary of State as the Obligee.

The surety company provides the Obligee a guarantee (the surety bond) that the customers, vendors and employees of a licensed business will receive payment for financial damages due to a violation of licensing law up the bond amount stated on the bond form ("penal sum"). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.