Alabama Grain Dealer Surety Bond

Comprehensive Guide to Alabama Grain Dealer Surety Bond.  An Alabama Grain Dealer Surety Bond is a type of surety bond required by the Alabama Department of Agriculture and Industries (ADAI) for businesses purchasing grain from farmers. The bond amount varies (see below). The cost of the surety bond is usually between 1% and 3% of the bond amount, subject to a minimum premium and fees of $150.

How to Get an Alabama Grain Dealer Surety Bond

At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:

1. Complete the easy to navigate and secure online application. ¹
2. Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
3. Sign some paperwork and pay the bond premium

Once these steps have been completed, the Alabama Grain Dealer Surety Bond will be shipped to the bond applicant.
^{1 -The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.} 

Once you receive the bond , Submit the original bond document to Alabama Department of Agriculture and Industries

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.

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Alabama Grain Dealer Bond Amount

The bond amount is determined by the Alabama Department of Agriculture and Industries based on the volume of grain purchased.

Annual Grain Purchases	Required Bond Amount
Less than 100,000 bushels	$10,000
100,000 to 500,000 bushels	$25,000
500,000 to 1,000,000 bushels	$50,000
Over 1,000,000 bushels	$100,000

Who Needs an Alabama Grain Dealer Surety Bond?

Any business or individual engaged in buying grain from producers in Alabama must obtain this bond. This includes:

• Grain elevators
• Feed mills
• Grain brokers
• Processors who purchase directly from farmers

How Does the Surety Bond Work? 

• Obligee: Alabama Department of Agriculture and Industries
• Principal: The grain dealer purchasing the bond
• Surety: The bonding company providing financial backing

If a grain dealer fails to pay a producer, a claim can be filed against the bond. The surety investigates the claim and, if valid, compensates the farmer up to the bond amount. The grain dealer must then reimburse the surety.

Maintaining Your Bond

Renew the bond annually (failure to renew may result in license suspension). Surety1 will send renewal reminders. Notify the surety of any changes in business operations.

What Happens If a Claim is Filed?

• The claimant (farmer) files a complaint with ADAI.
• The surety investigates and pays valid claims (up to the bond limit).
• The grain dealer must repay the surety for any claims paid out.

Frequently Asked Questions (FAQs)

Q: Can I get bonded with bad credit?
A: Usually yes, but may be higher rates.

Q: How long does it take to get bonded?
A: Often same-day approval if documents are in order.

Q: Is collateral required?
A: Usually not

Q: What if my grain purchase volume changes?
A: You must adjust your bond amount accordingly and notify ADAI.

Conclusion

The Alabama Grain Dealer Surety Bond is a legal requirement to protect farmers and ensure fair business practices. By securing the correct bond amount and maintaining compliance, grain dealers can operate legally and build trust with producers. For more details, contact the Alabama Department of Agriculture and Industries