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Collection Agency Bonds for Licensing

Collection agencies need a collection agency bond to meet licensing rules and protect clients from improper handling of funds. Surety Bonds Agent serves all 50 states with professional bond support. Apply online for a fast, free quote.

Contact Us for a Free Collection Agency Bond Quote

It’s easy with our simple 3-step process:

  1. Apply Online
  2. Get Quote
  3. Receive Bond
about bond type

What Are Collection Agency Bonds?

Most states require collection agencies to be licensed and bonded because debt collection is a highly regulated industry. A collection agency bond is a license bond that guarantees compliance with state laws governing debt collection.

In addition to guaranteeing legal compliance, collection agency bonds indemnify the state against liability for damages incurred by clients or debtors as a result of the unlawful or unethical actions of debt collectors licensed by the state. They also ensure that funds will be available for compensating those who experience a financial loss caused by such actions.

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The states that require bonding of debt collectors and collection agencies typically issue both individual licenses for debt collectors operating as sole proprietors and collection agencies that employ a staff of debt collectors. Failure to have an active collection agency bond in force at all times can result in license suspension or revocation.

The required bond amount is established by the state licensing authority. It’s usually is based on the collection agency’s volume of debt collected during the preceding 12 months.

img How Do They Work?

There are three parties to a collection agency bond, which is a legally binding contract. These parties are referred to as the “obligee,” the “principal,” and the “surety”:

  • The obligee is the state licensing authority requiring the bond.
  • The principal is the debt collector or collection agency purchasing the bond.
  • The surety is the company that authorizes the bond.

The terms of the surety bond agreement place the legal responsibility for paying claims entirely on the principal. If the principal commits a legal violation that causes a financial loss by a client or consumer, the injured party can file a claim against the principal’s collection agency bond. One common cause of claims is the principal’s failure to turn over to the client the funds collected from debtors. The surety will determine whether the claim is valid and should be paid.

The usual practice is for the surety to pay a claim initially, even though the principal is legally obligated to pay all valid claims. The principal must subsequently reimburse the surety.

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What Do They Cost?

The annual premium for a collection agency bond is a small percentage of the required bond amount. That percentage is known as the premium rate, and it’s set by the surety on a case-by-case basis.

The surety’s main concern is being reimbursed for claims paid on behalf of the principal, so the premium rate is based largely on the principal’s personal credit score. The higher the credit score, the lower the premium rate will be, perhaps as low as 1% for someone with very good credit.

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Choose Bond by States

We proudly serve all 50 states, offering a full range of surety bonds. To buy surety bonds online:

  1. Choose your state
  2. Choose the bond type you need
  3. Apply online to request a free quote

There’s no obligation, and we can often help you get bonded in 24 hours or less.

step by step guide

How Do Collection Agency Bonds Work?

  • Choose Your Bond Type

    Select the bond you need — commercial, contract, or any specialized bond. We help you find exactly what is required in your state.

  • Submit a Quick Application

    Complete a short online form. It only takes a few minutes, with no extra paperwork or long verification steps.

  • Get Approved & Receive Your Bond

    Get fast approval and receive your bond instantly by email. Your document is ready to use right away.

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Why Work With Us?

Easy Application Process

Simply fill out our convenient online application form to get started.

Extensive Carrier Network

We work with a wide range of carriers to provide many options to our clients.

Competitive Rates

As an independent agency, we can leverage our carrier network to find the most competitive rates for the bonds you need.

Quick Turnarounds

We work to get you bonded as quickly as possible, often in 24 hours or less.

Exceptional Service

Our experienced surety bond agents provide personalized assistance to help you understand your bonding requirements and options.

Call us Today!

And get a free consultation.

866-362-6637
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Our Insurance Company Partners Nationwide

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Testimonials

What our customers say about us

Super easy process. I found the bond I needed in minutes and received the approved document the same day. Great experience overall.

Emily R., Business Owner
Contractor

The application was fast, the support team was responsive, and the pricing was clear. Very smooth and professional. Everything was explained clearly, and I appreciated how quickly I received my bond.

Jason M., Contractor
Small Business Owner

Super easy process. I found the bond I needed in minutes and received the approved document the same day. Great experience overall.

Emily R., Business Owner
Oberman & Oberman

The application was fast, the support team was responsive, and the pricing was clear. Very smooth and professional. Everything was explained clearly, and I appreciated how quickly I received my bond.

Jason M., Contractor
Oberman & Oberman

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Request an online quote today! Or speak with one of our knowledgeable surety bond agents about the commercial bonds you are interested in.

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