At Viking Bond Service one of the questions we’re most commonly asked is, “do surety bonds expire?” The simple answer is yes, but most types of bonds need to be renewed to run for another term (the coverage period of a bond). Bonds generally run year to year.
Surety bond terms
The majority of surety bonds last for a set period known as a surety bond term, once the term period is reached the surety bond must be renewed/extended or the bond will expire. The length of a surety bond is defined when the surety bond is acquired. Bonds may last for multiple years if the premium is paid up front for those multiple years.
Are all bonds renewable?
Whether on not you can renew an existing bond when it is due to expire depends on a number of factors, which include the type of bond and whether the obligee (the entity requiring the bond) requires renewal. If the bond isn’t renewable you will need to obtain a replacement/renewal bond from the carrier. Some bonds cannot be canceled but must rather be released by the obligee. However in these cases, premium remains due on a yearly basis until the release is obtained.
Is it easy to renew a bond?
The process of renewing a surety bond is a simple process. The surety bonding company will again analyze the risk that the surety bond poses in order to calculate the bond premium. Key areas used to assess the likelihood of the bond being claimed against include business financial records, business experience, type of bond, and the principal’s (person taking out the bond) credit history. Once the bond premium is set the principal is required to pay the new premium to extend the term of the bond. The surety will then keep the bond in force. They will also make the obligee aware that the bond has been renewed in most cases by way of a Continuation Certificate. Some bonds are simply considered “Continuous Until Cancelled”. It’s important to note that to renew a bond the principal must respond to the Renewal Notice and pay the new premium before the original surety bond term expires. If the principal fails to complete this process before the bond term ends they may be required to apply for a new bond or obtain a Reinstatement.
Use Viking Bond Service for all your surety bond needs
Viking Bond Service is a leading supplier of surety bonds in the United States. We offer a fast, efficient, and affordable bonding services to help your business acquire the surety bond they need. Contact our team today to apply for a bond.
You may have heard about surety bonds but aren’t really sure what they are… Many people get confused between bonds and insurance but although they appear similar they can have very different implications for both businesses and consumers. Below you’ll find everything you need to know to understand the difference between surety bonds and insurance. Continue reading “Surety Bonds vs. Insurance”
Surety bonds are used to manage the contract risk for construction projects, satisfy licensing requirements, and other applications. But what does that mean for your business? Learning the basics about surety bonds can help you understand why a surety bond would be required and how they work.
If you’re an auto dealer in California you probably have some questions about auto dealer bonds! Viking Bond Service is here to help. Let’s start with some quick facts:
If you’re planning to apply for a state license to operate your business you may be surprised to find out that you need a surety bond! In many cases these commercial bonds are required as part of the business license application process. We’ve picked out five of the less well-known bond types below:
If you’re a used car dealer in New York State your surety bonding requirements are about to change! Thanks to the New York Assembly Bill 8166 the state is about to bring in key changes that used car dealers need to be aware of. Although the bill passed in 2016, its influence will only begin on March 28, 2017, when the bill comes into effect.
In many states, the use of subdivision bonds is increasing. If you’re a contractor, property owner, or developer you should learn the basics of these bonds to ensure you know what they mean for your businesses development projects.
In most states, if you’re involved in the sale or distribution of alcohol you’ll need to know about alcohol bonds.