A Conduct Bond is a surety bond required by the Texas Alcoholic Beverage Commission (TABC). This surety bond is required of retailers that do not hold a food and beverage certificate but serve alcoholic beverages on the premises. A Conduct bond may be required of a retailer whose gross receipts come primarily from the sale of alcoholic beverages.
TABC Conduct Surety Bonds are usually $5,000 bonds. Higher bond amounts may be required. According to the TABC, the bond amount is determined by the retailer's distance from the nearest public school.
The Conduct Bond is required to maintain the license or permit needed to continue to operate the retail location. The bond provides a form of guarantee that the retailer will abide by the TABC code, rules and state laws regarding alcoholic beverages.
In the instance where a retailer violates these laws, the state can place a claim on the bond. The Surety, the company providing the guarantee behind the surety bond would be responsible for a payment to the state up to the amount of the bond. If a claim was filed on the bond, the Surety would pay the state then attempt to collect from the retailer the amount paid on the claim. The retailer is still ultimately financially responsible for any amount paid out on a claim by the Surety.
Rates for Conduct Bonds vary widely. The premium rates are determined based on various factors which include credit and financial standing. Typically, the poorer the credit, the higher the quotes are.
The best way to get a truly accurate quote for a Conduct Surety Bond is to apply for the bond and let the underwriter review the request and put a quote together.
Viking Bond Service, Inc. will always attempt to get the best rate for the request. In instances where the rate is high to start due to challenged credit, our renewal department can remarket the bond if there has been an improvement in credit and/or financial standing.
Need a Bond? Here's how to get one. Read here for information about the bonding process.
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