Surety Bond Lingo Explained

Last updated on Thursday, June 28th, 2018 No Comments

What happens when a surety bond is………

A bond is renewed: When a surety bond is approaching renewal the surety company could do one of the following:

• Check your personal credit and renew with an increase or decrease in premium (depending on credit worthiness)
• Ask for additional information including (financial statements or license information)
• Decide not to renew your bond

Please note: If the surety company holding your bond decides not to renew, Surety1 can always re-shop your bond with our other markets to see if we can qualify you for another or lower rate.

A bond is cancelled: The surety company will mail out a notice of cancellation to the broker, principal (person getting bonded) and the obligee (entity requiring the bond).

A bond is pro-rated cancelled: The surety company will mail out a notice of cancellation to the broker, principal (person getting bonded) and the obligee (entity requiring the bond). They will notify the broker of the return premium and the broker will then refund the customer any non-earned premium.

Please note: Most surety Company’s first year bond premium is often considered fully earned.  

A bond is reinstated: The surety company will mail out a notice of reinstatement to the broker, principal (person getting bonded) and the obligee (entity requiring the bond).

Please note: There will usually be a nominal fee associated with reinstating the bond.

Surety1 Super Broker, Sarah Burgess

Posted in Selected State Surety Bonds. Tagged with: surety bond cancellation, surety bond lingo, surety bond renewal