Date Published: October 23, 2019

Bond Renewals – Surety1 Explains

 What is a Bond Renewal?

 To understand what a bond renewal is, we need to start with what is the bond term. The bond term specifies the period of time that a bond is active. The term will be stated on the bond form. It is the Obligee (the party that’s requiring the bond) that determines the term.

Bonds either renew or they non-renew. A bond that does not renew will be active for one single term. The length of the term can be for a single year or multiple years. The bond will state the effective date and end date.  One premium is collected and it covers all the years the bond is active. When the end of the term is reached the bond is cancelled. Examples of bonds that are non-renew include Title Bonds, Lost Cashier’s Check and Lost Trust Deed Bonds.

Most bonds are continuous until canceled. The length of the term can be a single year or multiple years depending on bond type. Most are annual, but, others, like the California Tax Preparer bond, the term is multiple years. The renewal is automatic. Some bonds will generate renewal documents. Others will not.

Renewal Documents:

Renewal documents can come in various forms. The most common is the Continuation Certificate. This is a signed and sealed document that extends the term of the bond until a new ending date. The document comes with a Power of Attorney, but, does not require the Principal’s signature.

A Verification Certificate can be provided by the Surety Broker. It certifies a bond is active, stating the effective date, bond amount, Obligee and Surety Company. The document is signed and sealed by the Attorney in Fact.

Renewal Bonds, generated by the Surety Company, are new bonds with the same bond number, but, with the new term stated on the bond. This document typically needs to be signed by the Principal.

For bonds that require documents, it is the Principal’s responsibility to forward them to the obligee. For those with no documents, the obligee will be notified by the Surety once the renewal premium has been paid. In some cases, no notice is given and the obligee will assume the bond is active unless they receive a Notice of Cancellation.

Will my premium change at Renewal?

The Surety Company determines the premium charged for the initial bond and for the bond renewal. According to Alexi Knudsen, in the renewals department at, “premiums will stay the same, for the most part. Especially if they are instant issue” bonds. Instant Issue bonds include Public Adjuster, Florida Telemarketer, California Process Server and Oregon Contractor’s License bonds, to name just a few. Premiums will also stay the same when the surety offers a set premium. Custom bonds fall into this category.Bond Renwals - Surety1 explains

A Surety may decide to do a soft pull, credit check. According to Alexi, “only challenged credit people will fluctuate” with their premium. Those bonds can often benefit from being re-shopped with another surety company who may offer a lower rate.

Not every bond will be renewed. There are cases when the Principal “no longer meet underwriting requirements or the Surety no longer write those types of bonds”, says Ms. Knudsen. In these cases, an agent can try and reshop the bond, even if the Principal’s credit is bad. If there are open liens or any claims on the bond, the agent may wish to let the cancellation stand.

The Surety Company will send out renewal quotes 60-90 days prior to expiration date on the bond. This allows the renewal department time to reshop, if necessary. Otherwise, they will mail out the renewal invoice 30-60 days prior to expiration date. Prompt payment is appreciated.

The renewals department at Surety1 offers a commitment to customers to be accessible and reachable, says Alexi. Relationships with agents and principals are built by spending more time with them. “That’s what sets us apart”.

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