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ARC Bond

ARC Surety Bond

ARC bond

Airline Reporting Commission (ARC) bonds serve as financial guarantee surety bonds. They are required by the ARC and guarantee that a payment accepted by a travel agent will be sent to the proper airline.

How Does an ARC Surety Bond Work?

An ARC surety bond provides a financial guarantee between three parties:

  • Principal: The travel agency, i.e. the party that will need to obtain the ARC surety bond
  • Obligee: The ARC, which mandates the ARC bond
  • Surety: The ARC surety bond underwriter

If an individual submits a payment to a travel agent, and the travel agent fails to forward this payment to the proper airline, an ARC bond claim can be completed. This provides a financial protection for the ARC and the airline.

Who Needs to Get an ARC Bond?

An ARC bond is necessary for travel agents and businesses that offer airline transportation services to customers. The ARC bond ensures a travel agent is accredited by the ARC to sell airline tickets to customers.

Furthermore, an ARC surety bond safeguards airline carriers. The bond guarantees full payment to the ARC and airline carriers for all transactions that are completed via the ARC platform.

It also is important to note that an ARC bond differs from other types of travel agency bonds. In many states, travel agency bonds are required to comply with all travel bookings, regardless of whether an individual books airline travel. Comparatively, an ARC bond is a requirement of the ARC, which means it is valid in every state. This means both an ARC bond and a travel agency bond may be required depending on a travel agent's location.

How Much Does an ARC Bond Cost?

The cost of an ARC bond may vary depending on the bond amount that needs to post, along with a travel agent's financial history.

In the first few years, the bond amount may range from $10,000 to $100,000. The total usually is based on a travel agent's average monthly net cash over the prior 12-month period.

Typically, the ARC will ask a travel agent to post a $20,000 bond. After two years, the bond may be reduced by 50 percent.

The cost of the bond is expressed as a percentage of the bond amount. Rates for this type of bond typically fall within 1% to 10%. Better credit qualified applicants receive rates on the low side of the range while applicants with challenged credit tend to be quoted on the mid to high side of the range.

Viking has been an ARC surety bond provider for more than a decade. Once our clients are bonded, we can continually review the bond for improved credit status which can lead to reduced rates at renewal.

Request an ARC Bond Quote Today

Viking Bond Service is a leading provider of all kinds of surety bonds across the country. We offer ARC bond support to clients with both good and bad credit, and in many instances, can even provide same-day ARC surety bond quotes.

At Viking, we are happy to handle all of your ARC bond needs. To request an ARC bond quote, please call us at 1-888-278-7389 or complete an Online Application.

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