Employees benefit from this bond.
Car washes need to be bonded with a car wash surety bond in order to comply with state, city, or county laws and regulations. Employees benefit from this bond since it protects employees from their employers taking advantage of them financially and legally. With this bond, employees are guaranteed full earned wages, fringe benefits, gratuities, and interest. This bond is similar to a wage and welfare surety bond since the employees are protected.
Bond Amount and Bond Premium.
The obligee determines the bond amount which is based on the number of car wash employees. For example, New York requires a car wash bond amount valued between $30,000-$150,000. The employees, the car wash, and the obligee need to be in an agreement of the terms of the bond. Also, any business that operates a car wash or car polishing in California must be bonded with a minimum bond amount of $150,000. Some states are more strict than others on the bond amount and bond requirements.
Similar to many other bond types, the bond premium (cost of the bond) is determined by several factors. Factors include personal credit, bond amount, state and city of business operation, the number of employees, etc. If a claim is filed against the bond, the surety company will pay out the claim which the car wash must repay the surety. A claim can be filed if employee wages are not paid in full or if their benefits are not provided. Just like a health club surety bond, a car wash bond is a financial guarantee bond since it ensures payment and benefits to employees. A financial guarantee bond is slightly more costly than a regular commercial surety bond since in the event of a claim taken against the bond, the surety company would have a greater financial responsibility.
Visit our free application page for this bond type as well as many others!