Massachusetts requires all motor vehicle repair shops to register with the state. Along with your application, you will have to post a surety bond to complete this process.
The purpose of this bond is to encourage auto repair shops to obey state laws and act ethically with their customers. Unlike insurance, which protects you and your business, a surety bond helps protect consumers.
A bond acts as a contract between three parties:
In the event your auto repair shop violates a law or regulation, a claim can be made against your bond. If this occurs, you may be required to pay fines or penalties to the state, in addition to paying any losses suffered by the claimant.
If the claim against your bond is upheld by the court, it will be used to pay fines, fees, and any losses suffered by the claimant. You will then have to pay this amount back to the surety company.
Upheld claims can make obtaining a new bond difficult. As Massachusetts requires a bond to register a repair shop, this can also put your business license at risk.
In this way a bond not only provides compensation to consumers, it also encourages lawful operation by vehicle repair shops.
Massachusetts requires all registered auto repair shops to post a $10,000 surety bond; however, you will not need to pay the full amount of the bond in order to receive a policy. Instead, you only have to pay a small percentage of the full amount to the surety provider. This amount is known as the bond’s premium.
Premium rates can vary from as low as 1% to as high as 15% based on several factors, including:
NNA Surety Bonds offers $10,000 MA motor vehicle repair shop bonds with annual premiums as low as $100 based on your credit history and business financials.
You will be unable to legally register your auto repair shop without posting a $10,000 bond. Massachusetts requires this bond as a way to promote legal and ethical practices by repair shops and to protect consumers.
Bonds are important tools that help encourage professionals to fully understand and uphold the laws and regulations guiding their industry.
Registering your repair shop with the state includes the following steps:
More information, including all necessary forms, can be found on the Commonwealth of Massachusetts website.