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Find out the bond requirements for your business. Start by inquiring from the city clerk. If the clerk does not know, seek help from any occupational or industrial organization that represents the type of services your business provides. If all else fails, contact the Alabama Securities Commission.
Obtain a license to be bonded. You must inquire about the licensing requirements from the local body that regulates bonds. This varies widely. For example, debt solution businesses and those conducting the sale of checks must file Form SA with supporting documents. Other towns and occupations may require exams, financial proof and other information. A license ensures that you are fully aware of the rules of ethical business practices in Alabama. A license is required before getting a surety bond.
Apply for a surety bond. There are many independent companies in Alabama that provide surety bonds. Much like applying for a loan, a bond seeker must have a good credit history and provide certain financial information.
Sign the indemnity agreement after being approved by the independent surety bond producer. This legally obligates you to the requirements of the bond. You will have to pay a premium, but this cost varies depending on the type of bond.
Send the necessary documents proving that your business holds a surety bond to the obligee, which is the body that requires that you get bonded. This can be the city clerk, industry organization or Alabama Securities Commission.
Satisfy the bond requirements of the party requesting that you get the bond, also known as the obligee. The obligee will want the bond to be worth a certain amount of money. Another requirement will be language regarding circumstances under which the bond will be paid if there is a breach of requirements. If you, the principal on the bond, violate your agreement with the obligee, the surety company will pay the obligee and will require you to pay the bond's entire amount plus legal costs.
Find a Tennessee bond provider. The best place to check first is with a local insurance agency. You may get a discounted premium if you buy a bond from a company that already carries your homeowners or automobile insurance. Not every insurance company can issue surety bonds, but your insurance agent should be able to refer you to another company or you can search for alternatives online.
Complete the application required by the Tennessee surety company. For you to be bonded, the bonding company must first approve you. You may have to provide other documentation the bonding company requires to help it determine your risk factor. You may be required to put up collateral as part of the bond.
Pay the premium for the bond. The premium amount will depend on the Tennessee bond's face value and on what collateral you have provided. The surety company will require that you sign an indemnity agreement, which says you will pay back the bond's face value to the surety company if the obligee collects a claim on it.
Endorse the bond and give it to the obligee. Once you have completed this step, you are bonded in the state of Tennessee.