A Worker’s Compensation bond is a type of bond required of employers that wish to enter into a self-insurance agreement with their state. In states where the option to self-insure the required worker’s compensation coverage, a surety bond requirement may exist if that option is selected.
Worker’s compensation bonds are a type of financial guarantee surety bond. It provides a form of guarantee that any worker’s compensation payments due employees will be paid. In a case where a payment is due but not paid by the employer, a claim may be placed on the bond. The surety would pay the amount due up to the bond amount. The surety would then attempt to collect the amount paid out on claim from the employer. The employer is ultimately financially responsible for any claims paid on the bond.
There are also situations where an employer can opt to pay into a self-insurance fund. A worker’s compensation bond may be required in these situations as well to guarantee payments to the fund are made as agreed.
The penalty or bond amount varies state to state. Each state either dictates the required bond amount or provides a way to calculate the amount. The bond amount given is the total amount the Surety is responsible for in the instance of a claim or claims on the bond.
Viking writes worker’s compensation bonds nationwide. We are experienced with these bonds and have markets that provide competitive rates for them. These bonds are typically simple and easy to process and quote. Quotes are usually obtained the same day or within 24 hours of receiving the surety bond application and any supporting documentation.
A Performance Bond may be required to bid for, or accept a contracted job. Learn about Performance Bonds here.