Have you heard of the new electronic surety bonds? Feeling a little confused about what this means for your business? Don’t worry; our guide to electronic surety bonds can help you stay on top of your business surety bond needs!
What is an electronic surety bond?
An electronic surety bond is a simple electronic version of traditional paper surety bonds. It provides all of the same protection and uses all of the same terminologies as a paper bond. This makes it easy to transition to the new electronic bond system.
Which states use electronic surety bonds?
Not all states have adopted electronic surety bonds yet. As of October 1st 2017 the following states and US territories will use electronic bonds for at least some of the surety bonds issued in the state:
- North Carolina
- North Dakota
- Rhode Island
- South Dakota
Are all surety bonds switching to an electronic version?
The answer to this depends on which state your business operates in. Each state is adopting the new electronic bonds at a different rate but currently, only a selection of bonds in each participating state are switching to the electronic version.
Why are bonds moving from a paper version to an electronic version?
Electronic surety bonds offer a simpler way to manage the application process, issuance, and tracking of surety bonds. Using electronic bonds also eliminates the need to mail applications and bonds, which improves efficiency and makes the bonding process quicker.
How do I apply for an electronic bond for my business?
The application process is very similar to how you apply for a paper bond. The Nationwide Multistate Licensing System, known as the NMLS, manages electronic bonds. To apply or renew a bond you’ll need to give your bond broker permission to act on your behalf with the NMLS. Your broker will manage the application process and then you’ll be asked by the NMLS to approve and complete the application. This system notifies the necessary agencies to ensure that your business is operating legally.
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