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Michigan Surety Bond Guide

Updated: Feb 25

Surety Bonds in Michigan: A Comprehensive Guide

The concept of Surety Bonds in Michigan encompasses a wide range of bond types designed to safeguard the interests of various stakeholders in different contractual agreements. Whether you are a contractor, business owner, or a government entity, understanding the dynamics of surety bonds is crucial for legal compliance and financial security in contractual dealings.

Michigan Capital with Construction Crew
Surety Bonding at the Capital

Table of Contents

Key Takeaways

  • Surety Bonds are vital in ensuring contractual compliance and financial assurance in various sectors in Michigan.

  • There are several types of Surety Bonds including License & Permit Bonds, Contract Bonds, and Court Bonds.

  • Obtaining a Surety Bond in Michigan involves a systematic process with distinct requirements.

  • The cost of a Surety Bond is influenced by several factors including the type of bond, the amount of the bond, and the creditworthiness of the applicant.

Types of Surety Bonds

Michigan, like many other states, categorizes surety bonds into several types each serving a unique purpose in different sectors:

License & Permit Bonds

These bonds are mandatory for certain professions and businesses to operate legally in the state. They ensure compliance with state laws and regulations.

Contract Bonds

Contract bonds, often required in construction projects, ensure the fulfillment of contract terms by the contractor. They include Payment Bonds, Performance Bonds, and Bid Bonds.

Court Bonds

Court bonds are required in various legal proceedings to ensure the protection of certain parties' interests within the judicial system.

The Mackinac Bridge at sunrise with construction workers in the foreground.

Obtaining a Surety Bond in Michigan

Obtaining a surety bond in Michigan involves a few systematic steps:

  1. Identify the Type of Bond Needed: Determine the specific type of bond required based on your profession, business, or the specific contractual agreement.

  2. Find a Reputable Surety Bond Agency: Engage with a reputable surety bond agency such as Shorewest Surety Services to get guidance on the bond process.

  3. Submit Required Documentation: Provide all necessary documentation for underwriting. This might include financial records, business experience, and credit score assessment.

  4. Receive a Quote: Once your application is reviewed, you will receive a quote for the bond premium.

  5. Pay the Bond Premium: Upon agreement on the terms, pay the bond premium to activate your bond.

  6. Submit Your Bond: Submit your bond to the required party or regulatory body.

Cost of Obtaining a Surety Bond in Michigan

The cost of obtaining a Surety Bond in Michigan varies based on several factors:

  • Type of Bond: Different bonds have different premium rates.

  • Amount of Bond: Higher bond amounts typically result in higher premiums.

  • Credit Score of Applicant: Applicants with better credit scores may receive lower premium rates.

  • Surety Bond Agency: The agency you choose can also affect the cost due to different underwriting standards and fees.

Specific Bonds in Michigan

In Michigan, certain bonds are tailored for specific sectors or professions, ensuring a harmonized operational environment:

Michigan Auto Dealer Bonds

Auto dealer bonds are essential for automotive dealerships in Michigan. They ensure compliance with state laws and provide financial protection to consumers against fraudulent practices by the dealer.

  • Bond Amount: Varies based on dealership type and size.

  • Validity: Typically renewed annually.

  • Cost: Usually a percentage of the bond amount, influenced by the dealer's credit score.

Vehicle Uniform Surety Bond

These bonds are crucial for individuals or entities that wish to title a vehicle when the original title is missing or unavailable.

  • Bond Amount: Equal to the vehicle's appraised value.

  • Validity: Generally valid for three years.

  • Cost: Percentage of the bond amount, credit-dependent.

Contractor Surety Bond

Contractor Surety Bonds are essential for construction contractors in Michigan. They assure project owners of contract completion in accordance with the stipulated terms.

  • Bond Amount: Varies based on contract value.

  • Validity: Valid for the duration of the contract.

  • Cost: Influenced by the contractor's credit score and financial stability.

Benefits and Limitations of Surety Bonds

Surety bonds offer a plethora of benefits but come with certain limitations:


  • Financial Security: They provide financial backing ensuring contractual obligations are met.

  • Legal Compliance: Help in adhering to state laws and regulations.

  • Enhanced Credibility: Bolster the credibility of businesses and professionals.


  • Cost: Can be expensive, especially for individuals or entities with poor credit.

  • Claim Risk: In case of a claim, the principal is required to reimburse the surety.

Construction Crew with Detroit Skyline

Frequently Asked Questions about Michigan Surety Bonds

Here are some common questions regarding Surety Bonds in Michigan:

How do I obtain a surety or fidelity bond in Michigan?

You can obtain a surety or fidelity bond in Michigan through a licensed surety bond agency like Shorewest Surety Services. The process involves identifying the type of bond needed, finding a reputable surety bond agency, submitting the required documentation, receiving a quote, paying the bond premium, and then submitting your bond to the required party or regulatory body​​.

What is a Surety Bond in Michigan?

A Surety Bond in Michigan acts as a three-party guarantee between the surety, the obligee (usually the project owner), and the contractor, ensuring the contractor will perform a contract in accordance with contract documents​.

What is a Notary bond?

A Notary bond is a financial guarantee purchased from a surety company ensuring the Notary will fulfill all obligations to protect the public from financial harm resulting from any wrongdoing when performing notarial duties​

Why are surety bonds required in Michigan?

Surety bonds serve as a guarantee that the bondholder will meet certain conditions, providing a level of financial security and ensuring compliance with state laws and regulations​

Why do surety bonds require a credit check?

Credit checks are required to assess the risk the surety bond agency is taking by issuing the bond. It also influences the bond premium rate​

Shorewest Surety Bond Agents
Shorewest Surety Bond Agents

Wrapping Up Michigan Surety Bonds

Understanding the landscape of surety bonds in Michigan is crucial for legal compliance and financial security in various professional engagements. Partnering with Shorewest Surety Services offers access to a network of over 15 distinguished surety companies, ensuring swift and efficient processing tailored to your unique needs.

Your success is our priority. Take the initial step towards navigating the surety bond process by clicking the "Get Started" button for a free consultation with our bonding experts. With Shorewest Surety Services by your side, you're well on your way towards a secure and compliant professional journey in Michigan.


Written By: Shorewest Surety Services

Shorewest Surety Services is a premier provider of surety bonds in Michigan. With decades of experience, we have been advising contractors, business owners, government entities, and other professionals on the complexities of surety bonds. Our deep-rooted expertise ensures that we provide insights that are both accurate and tailored to the specific needs of Michigan's diverse industries. For inquiries or further assistance, reach out to us at or (800) 264-1634.

Shorewest Surety Services


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