CONCORD – The Senate voted 23-0 on 2/17/10 to repeal a requirement that any business that collects the meals and rooms tax post a surety bond to ensure that taxes would be paid.
Further investigation into this surety bond requirement revealed that the department had other measures in place already to ensure compliance and the bond was not needed.
New Surety Bond required for appraisers for the state of Arkansas. The surety bond amount is set at $20,000. Under the terms of A.C.A 17-14-406 (b) et seq, every Appraisal Management company described in those statues must obtain bonding. The surety bond form has a 60 day cancellation clause and a aggregate limit, if you review the state statue. The obligee is the Arkansas Appraiser Licensing and certification Board.
When you apply for a bond the surety will evaluate the following things
Experience:
Some surety companies won’t write your surety bond if you don’t have experience or if you are a new business. If this is your case then you may have to be placed in a non-standard surety bond program.
Credit:
For a standard rate the surety company is looking fro a score above 675. If you have a low score or bruised credit them you may have to apply for a non-standard surety program
Assets:
Even if you have good credit and experience, you still must have the assets to support a claim. If you have a 700 credit score, but you have $0 in the bank you may have to be placed in a non-standard surety program.
Each scenario is different and there are exceptions to the rules. I have seen clients that have excellent credit and no assets and still qualify for normal rates. I have also seen clients that have low credit scores and plenty of assets qualify for normal rates. So don’t get discouraged there are markets that can help you in almost all situations.
We now provide a estimation of what the surety bond should cost if you qualify.
Keep in mind this is not an exact cost, but a estimation. You can check out the Fast Surety Quote system here.
The nice thing about fast surety quotes is it takes seconds.
*A Surety bonds rate is based off of your credit, Surety bond type, State and financial situation so in order to receive an approval you must submit a application.
Instead of telling your customer I don’t know what the cost is.
Now you can tell your customers what the cost could be in seconds.
While other companies are requesting collateral or declining these bonds; we are developing new programs.
NEW PROGRAM FOR FLORIDA MVD BONDS
2% RATE ($500)
NO COLLATERAL
NO FINANCIALS NEEDED
SUBJECT TO CREDIT REPORT AND CREDIT SCORE ABOVE 675
Why are bonds being required?
A bond is usually signed into law to regulate business and safeguard the public against fraud. A surety bond helps the client seek financial compensation from breach of contract or if they have been defrauded of money.
Underwriting for these bonds
Loan modification bonds are underwritten similar to a loan. The surety agent will review the principal’s credit, personal financials as well as work experience. The surety will not only evaluate the clients personal financial condition they will review the business’s financial stability too. The underwriter will request a business financial statement usually a year end statement and the company’s most current quarterly statement. We understand will most of these bonds that a yearend financial statement may not be applicable since you may be a new business. If this is the case other underwriting may be required to obtain surety credit. Keep in mind that every scenario is different since everyone’s financial situation is not the same.
AB 1319 – Talent Service. Provides that prior to advertising or operating in business, a talent service shall file a bond with the Labor Commissioner a surety bond in the penal sum of $50,000 this is a conditioned upon compliance.
The obligee for the talent Services bond shall be in favor of, and payable to, the people of the state of California, and shall be for the benefit of any person injured by any unlawful act, omission, or failure to provide the services of the talent service. The Surety bond cost as well as approval is based upon the principals credit and financial condition.
This bill is currently in the senate for a second time,amended and re-referred to committee on appropriations
Surety protecting business
In these tough times you need to make sure that your assets are protected. What happens if an employee steals from you or one of your checks is forged or altered?
Is there a insurance policy that can protect you from this? The answer is yes there is. A surety bond can protect you from these everyday occurrences.
This bond is typicality called a fidelity bond. A fidelity bond is more like an insurance policy than a bond because with a fidelity bond claim you do not have to pay the surety back. You need only to pay the deductible and the surety takes care of the rest. The surety company offers a wide range of products that can be added to your policy such as employee theft inside the premise as well as off site. You can add coverage for forging as well as alteration of checks. The bond amount can also be adjusted to fit your growing business needs.
The cost of fidelity bonds
You would think with the exposure to the surety that fidelity bonds would be expensive, but there actually are not. Many factors are involved to determine the cost of a fidelity bond. The rate of the surety bond is also different for each surety. A few ways a surety may determine the bond rate may be by the class of business, how many employees, cash exposure and checks and balances in place to protect the company from a claim.
In this economy protecting and securing you company’s future is vital, so protect your business with a surety bond.
I need a surety bond, and I don’t know what type I need? An easy way for you to find out what type of bond you need, besides calling us, is to call the obligee. The Obligee will have the direct answer since they are the entity that is requiring to carrier the bond. Normally if you are applying for a license it is a State Department. Permit may be needed by the state as well, but most of the time it is the city whom needs them. It is also helpful to check your application that must be returned to the state. The licensing packet usually has a copy of the bond form and its requirements.
How much will my Surety Bond Cost?
The Cost of your surety bond depends. The Rate is determined by State, type of Bond, you credit, your personal financials, business financials and risk. All scenarios are different so some of the above listed information may be required or not. Some bonds like, notary bonds are not based on credit or financials. Notary bonds simply have a filled rate, were other bonds have a sliding scale. The reason for that is unlike MVD bonds , contractor license bonds, and Mortgage broker bonds, notary bonds claim ratio is low for now. So the cost of the bond may start out at a 2% but the rate can jump up to 25% depending on your scenario.
Why do I Need a surety bond?
A surety bond does not protect you or your business, it protects the obligee. The obligee requires Surety bonds to protect them from, monetary compensation, breach of contract, payment of certain taxes, fraud and whatever else they have weaved into the bond form. Unlike insurance surety bonds are a requirement and must be met before you can start or continue operating your business.
The New Washington insurance producers bond amount is based on a sliding scale.
The minimum surety bond amount will be $25,000 or 5% of your total premium up to 100,00 whichever amount is greater. This goes into effect July 1, 2009.
If you are an insurance producer that writes directly or indirectly and you are not appointed with that company you must obtain the bond. If you have not obtained your bond it’s a good time to start now before it is to late. The Insurance agent is responsible for the correct bond amount the bond form has a aggregate limit and a 30 day cancellation clause in it. We can help you with your Washington insurance producer license bond so apply today
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