How Do Utility Bonds Work?

If a utility company has told you to get a surety bond before they will turn on electricity, gas, water or another utility at your home or business, you’re probably wondering: How do utility bonds work? The better you understand the answer, the easier it will be to meet the surety bond requirement and get utilities turned on ASAP. This blog post walks you through everything you need to know. 

Surety Bond Basics

Before we dive into the specifics of utility bonds, let’s cover the basics of surety bonds. Each type of surety bonds works a little differently, but the basics of every surety bond agreement are the same. 

There are three parties involved: the principal, the obligee, and the surety. The obligee has the right to file a claim with the surety for damages caused by the principal. Provided that the claim holds up under investigation, the surety guarantees the obligee immediate payment in full. After paying the obligee, the surety has the right to collect that same amount, plus interest and fees, from the principal using whatever legal recourse necessary. 

Basically, a surety bond protects one party from the misbehavior of another. The “victim” in that scenario has a way to seek damages, and the “perpetrator” is held accountable for their actions. The surety acts as an intermediary. The surety agrees to pay the obligee, but they don’t accept financial liability. That responsibility always rests on the principal – eg. the person who obtains the surety bond. 

Utility Bond Basics

In a utility bond agreement, the person seeking utilities is the principal, and the utility company is the obligee. If the principal does not pay their utility bill for an extended amount of time, the obligee has the right to seek compensation equal to the unpaid bill from the surety. The surety will compensate the obligee for the unpaid bill, but then the principal (who left the bill unpaid in the first place) must pay the surety back. 

Utility companies require surety bonds from some people to guard against the risk and financial consequences of unpaid bills. If enough bills went unpaid, it could put the utility company and the essential service it provides in jeopardy. That’s why almost all of them use surety bonds to manage this risk. You may also hear this type of surety bond referred to as a utility deposit bond

Why Do I Need a Utility Bond?

Utility companies use their own discretion when deciding who needs a surety bond and for what reason. That being said, most people need a utility bond for one of these two reasons:

  • Payment History – If someone has a history of unpaid utility bills or unpaid debts in general, it’s a red flag for utility companies. Utility bonds protect the utility company in case the payment issues continue. 
  • Consumption Expectations – If someone (usually a business) plans to consume a large amount of utilities, they will have large bills. For instance, a factory may consume tens of thousands of dollars worth of electricity each month. Utility bonds help keep a utility company financially solvent if those huge bills go unpaid. 

What Do Utility Bonds Mean for Me?

Let’s get right down to business. If you need a utility bond, your next step is to find a surety agency who will issue you a surety bond. Look for one that issues bonds for your state, creates quotes quickly, and goes above and beyond for bond seekers. You can spend time searching – or you could find everything you’re looking for through Viking Bond Service.

The next step is to apply for the utility bond. You will need to fill out a standard bond application, which asks for basic information about your background and finances. You will also need to supply a copy of the utility bond requirements, which you should have gotten from the utility company. Finally, you need to agree to a credit check.

After reviewing the application materials, the surety agency will offer you a quote for the surety bond cost. How much you pay depends on the size of the bond you need (which is up to the utility company) and how much risk you pose (which is up to the surety agency). The lower your credit score the higher your premium. That being said, bad credit doesn’t inflate premium prices significantly, and with the right surety agency partner, obtaining a bond with bad credit isn’t impossible either. 

Once you pay the premium and activate the bond, you will need to keep it active for as long as the utility company requires. That may involve renewing the bond on an annual basis. At renewal, the surety agency reevaluates your credit and quotes a new premium price – which could be lower or higher than before based on recent credit history. Failure to renew or keep a bond may lead the utility company to suspend service. 

Viking Bond Service – Your First Call for Utility Bonds

Don’t let the search for a surety agency leave you without utilities. Viking Bond Service issues utility bonds in all 50 states, and we have the experience and resources to make the bonding process fast, easy, and affordable. We can even quote you a price within 24 hours so that you can fulfill the surety bond requirement faster. 

Get started now by completing this online application. Or get more information first. Our team is here to answer all your questions at 1-888-278-7389 or by contacting us through the form on this page. 

Why is an Alcohol Tax Bond Necessary?

Have state regulators told you to get an Alcohol tax bond? Are you wondering what this surety bond requirement means for your business and why it’s necessary? Those are the right questions to be asking, because the requirement has big consequences for your business. This blog explains why it’s necessary and walks you through the basics. 

What is a Liquor Bond?

Some states call it an alcohol tax bond, others call it a liquor tax bond. By either name, the bond holds a business accountable if it fails to supply the state with tax revenues required of businesses involved in the manufacture, warehouse, distribution, or sale of alcoholic beverages. 

The state agency responsible for regulating the alcohol industry may file a claim against the alcohol tax bond for any tax revenues a business doesn’t pay. The surety agency that backs the bond will investigate the claim to confirm that the details are true, then it will settle the claim. Liquor tax bonds provide a guarantee to state agencies that they will receive tax revenues owed to them, whether from the bonded party or from the surety agency that backs the bond. 

When the surety agency settles a debt, they are only acting as an intermediary – they aren’t accepting financial liability. That responsibility always rests on the bonded party, which is the business that obtains the alcohol tax bond. Whenever the surety agency settles a claim, the bonded party must pay that debt back with interest and fees added to the final cost. 

Why do I need a Liquor Bond?

First and foremost, you need an alcohol tax bond because the state requires it, and it’s illegal to operate without one. In most cases, the state will not issue you a business license without proof of a surety bond, and if the surety bond lapses at any point, the license does as well. Penalties vary for operating without a liquor license, but they range from fines, to permanent loss of license, to jail time in extreme circumstances. Why is an alcohol tax bond necessary? Because there would be serious repercussions without one. 

But that doesn’t answer our initial question – why do states require an alcohol tax bond in the first place? Since bonds hold the bonded party financially accountable for misbehavior, they act as a deterrent. People are less likely to do something wrong – in this case fail to pay taxes – if they know they are liable for any damages. In that way, surety bonds help to regulate the alcohol industry and keep bad actors from entering or operating within the industry. 

Surety bonds also insulate the state budget from the revenue lost because of unpaid taxes. The claims process guarantees payment. It provides a mechanism for the state to seek and receive compensation to cover the loss of unpaid tax revenues. States feel more confident issuing someone a license because they know the surety bond protects the state (and the public at large) from the risk of unpaid taxes. There’s a reason most states have some form of the alcohol tax bond: it’s a necessary component of good governance. 

How do I obtain a Liquor Tax Bond?

There’s no way around the surety bond requirement. Your best bet is to seek out a bond that meets the state’s requirements ASAP. It’s also important to pick the right surety agency to partner with, because some are better than others. Move fast and pick right by working with Viking Bond Service – a surety agency equipped to offer liquor tax bonds in every state where they’re required. 

To obtain a bond you will need to complete a standard bond application, supply a copy of the surety bond requirements, submit to a credit check, and possibly turn over a financial statement. Other documentation may also be required. The surety will use this information to evaluate your credit risk (eg. how likely you are to cause claims and take responsibility for those claims) and then quote you a price for the surety bond. Expect the surety bond cost to be a small percentage of the total bond value. You should also expect to pay more if you have bad credit or blemishes on your financial record. 

Once you pay the surety bond premium, you receive a document proving you’re bonded according to the state’s requirements. You will need to renew that bond periodically (typically every 12 months) by paying the premium, which can go up or down annually with changes in your credit. 

Viking Bond Service – Your Alcohol Tax Bond Partner

Alcohol-based businesses need a surety agency they can depend on for as long as they’re in operation. Surety bonds are a fact of life in this industry. The best way to stay compliant is with the help of the right surety agency. Viking Bond Service strives to be that agency from your first point of contact onwards. 
If you have questions about liquor tax bonds, surety bonds, or anything else, our team has answers. Reach us through the contact form on this page or by calling 1-888-278-7389. You can also get the bonding process started right now – complete our online application to get a quote back in 24 hours in most cases.

Power Of Attorney Surety Bond Verification Process

At Viking Bond Service, we strive to take the mystery out of the bonding process. That’s why we regularly use our blog to clear up common questions and confusion about how the surety bond process works. In this entry, we will address something we receive queries about all the time: the surety bond power of attorney process. It’s an important but often misunderstood part of getting bonded – and something everyone should understand before getting a surety bond of their own. Read on for all the info you need.

Why do surety bonds require a power of attorney?

Before we answer this specific question, it’s important to understand how the surety bond process works. When you need to obtain a surety bond – to get a professional license, finalize a contract, meet the mandates of the court, or for some other reason – you will likely work with a surety agency or broker (one like Viking Bond Service). These agencies and brokers function as intermediaries between you (the bonded party) and the surety agency that actually issues and backs the bond. Many people get insurance coverage through a similar process – they work with a broker or agent who arranges coverage provided by a much larger insurance agency. 

Now to return to our original question, a surety bond grants a broker or agent the right to administer a surety bond on behalf of the surety company that backs the bond. To put it differently, the power of attorney givest the surety bond actual weight and legal standing. Without granting power of attorney to the surety broker, the bond could not be enforced, meaning it wouldn’t be possible for the obligee to file claims against the surety bond (which is the whole reason they exist). A surety bond without an accompanying power of attorney agreement is just a piece of paper. It only becomes a legal, active, binding surety bond agreement once you (the bonded party, otherwise known as the principal) grant power of attorney for the surety bond agreement to an agency or broker. 

How to complete power of attorney surety bond requirements

If you’re still unclear about how a surety bond power of attorney works, don’t worry – It’s a confusing concept that gets deep into the details of surety bond agreements. Most people don’t try to make sense of surety bond agreements on their own. Instead, they rely on a trusted surety agency to walk them through the fine print, point out every detail that matters, and explain any concepts that aren’t perfectly clear. Surety bond experts can explain how the power of attorney component works and why it matters. Perhaps more importantly, they can explain this information in the context of whatever bond you’re seeking. You don’t just get a general answer – you get one that directly relates to the surety bond you need. 

Once you find a surety agency to partner with, rely on them to help you complete the power of attorney portion of the bond application. You will need to fill out a form with basic information about your name and date. That’s not the hard part. Where you will want to rely on your surety partner is for understanding what you’re committing to by signing the power of attorney document. A good surety agency will be happy to explain the specifics, and they will never pressure you to sign something you don’t fully understand. If you feel like your surety partner doesn’t have your best interest at heart, don’t sign the power of attorney form or pay the premium. Instead, seek out a different surety agency that cares about keeping you informed and updated. 

Viking Bond Service – A Surety Agency for All

In the intro to this blog, we talked about our philosophy here at Viking Bond Service: a philosophy based on service, excellence and affordability. At all times and for each person we work with, our whole team endeavors to make the bonding process clear to understand and simple to complete. That’s why we dove into the complex topic of power of attorney surety bond requirements, and why we have a huge library of resources for you to consult and explore as you find the right surety bond (and surety agency) for you. 

If you have specific questions, we are happy to provide answers. Call one of our bonding experts to get no-cost, no-obligation advice. You can reach our team at 1-888-278-7389. Don’t feel like talking on the phone? No problem – send your questions through the contact form on this page. 
If you already have enough information, perhaps you’re eager to get a surety bond ASAP. In that case, it takes just minutes to complete the online application process, after which you will receive a quote for the surety bond cost within 24 hours in most cases. Complete our online application form at your convenience to get the process started.

Georgia Vapor Surety Bonds: What Are They?

Surety bonds are now required for many businesses that sell nicotine vapor products in the state of Georgia. If you’re a part of the vape industry, it’s vital to understand how Georgia vapor surety bonds work and how they affect your business. Rely on the team at Viking Bond Service for good information. 

When did Georgia Vapor Surety Bonds become mandatory?

The Georgia legislature passed a bill in July, 2020 mandating all sellers of vapor or other alternative nicotine products to have a surety bond valued at no less than $1,000 at all times. All new and existing vape shops, and many stores that sell vape products as part of a diverse inventory, will need a Georgia Vapor Bond. 

What is a Georgia Vapor Surety Bond?

This type of surety bond holds the bonded party (in this case the vapor seller) financially responsible if they violate Georgia state laws applicable to vapor sales. If the state agency responsible for regulating vape sales believes a business has violated any law, it may file a claim against the surety bond seeking financial compensation. The surety agency that issues and backs the bond will then launch an investigation to determine if the vapor seller did what they’re accused of in the claim. If so, the surety agency settles the claim in full without further delay. Surety bonds guarantee payment for valid claims – but the surety agency does not accept financial responsibility. When the surety agency settles a claim, the bonded party must pay that debt back in full with interest and fees added. 

Why did lawmakers create the Georgia Vapor Bond Requirements?

In the same year that lawmakers created the Georgia vapor bond requirements they also raised the taxes on vapor products and raised the age someone must be to buy vapor products from 18 to 21 – a wave of legislation meant to bring oversight and accountability to the Georgia vapor industry. Lawmakers often require business in sensitive or emerging industries to obtain surety bonds as a way to protect the public, encourage upstanding conduct, and hold businesses accountable for rule breaking. That same rationale applies here: lawmakers created Georgia vapor bond requirements to promote higher standards within the statewide vapor industry. 

How much will a Georgia Vapor Bond cost?

Not much. The cost (called the premium) is only a small percentage of the bond’s $1,000 value. Premium prices depend on the bond seeker’s credit score and financial history. People with great credit will pay less. Alternatively, someone with a credit score below 700 or a bankruptcy on their record will pay more, but not drastically so. Make sure bad credit doesn’t affect your ability to get approved for affordable surety bonds in Georgia – work with Viking Bond Service to find options regardless of your credit. 

Who Will Need a Georgia Vapor Bond?

Anyone involved with the sale of vapor-based nicotine products, either directly or indirectly, may potentially need a surety bond to continue operating legally. Fortunately, the cost of this bond is relatively low, as we established earlier. And with the help of a top-notch surety agency like Viking Bond Service, obtaining a surety bond doesn’t have to be a confusing or time-consuming process. If you’re unsure whether you need a surety bond, contact our team for more information. 

How to Apply for a Georgia Vapor Surety Bond

There are just several steps involved with applying for one of these surety bonds. First, you will need to complete a standard bond application. It will ask for information about your background, your finances, and your vapor sale business. Your business partners may also need to fill out surety bond applications. Next, you will need to supply a copy of the Georgia surety bond requirements written by state regulators. A financial statement may also be necessary, and all bond applicants will undergo a credit check. Underwriters at the surety agency will use this information to evaluate an applicant’s risk, meaning their likelihood to cause claims and to pay the surety agency back for settlements. As mentioned earlier, bad credit will lead to a higher quoted price. After paying the premium, the Georgia vapor bond stays active for 12 months before it needs to be renewed. The renewal process works much like the initial application: submitting some basic documentation and having your credit examined. If your credit standing has gone up or down since your last application, your premium price could do the same. 

Viking Bond Service – A Partner To Georgia Vapor Sellers

The Georgia vapor bond requirements may be new, but they don’t need to catch you and your business off-guard. The most important thing is to comply with this mandate sooner rather than later. Viking Bond Service makes that easy by offering all the resources you need along with a helpful team to serve you throughout the process. Talk to one of our bond experts by calling 1-888-278-7389 or by sending your question through the contact form on this page. Or get the bonding process started right now! Complete our online bond application at your convenience.

NY’s Debt Collector Surety Bond Requirements: What to Know

Big changes may be coming for New York state consumer debt collectors. Who, exactly, falls under that title? According to the New York Banking Superintendent, “Any person who engages in a business, a principal purpose of which is the collection of consumer debts or of debt buying, or who regularly collects or attempts to collect, directly or indirectly, consumer debts owed or due to another person.” If this definition applies to you, prepare for sweeping new legislation.

What is the current process for debt collection agencies in New York?

Licensing requirements already exist for debt collectors operating in some of the most populous parts of New York State: Buffalo, Yonkers, and New York City specifically. Unique licensing requirements exist in each municipality, including the requirement to obtain, in some cases, a specific type of surety bond known as a collection agency bond in a specific amount. A proposal included as part of the 2021 New state budget would require most if not all the consumer debt collectors in New York State to complete the requirements to obtain a license. Somewhat confusingly, this bill would not replace or supersede the existing municipal licensing laws. Rather, it would extend licensing requirements to debt collectors who operate outside of New York City, Yonkers, or Buffalo. As part of those licensing requirements, individuals would need to obtain a New York debt collector surety bond. 

What do surety bond requirements exist?

State governments and regulatory agencies use things like New York debt collector surety bond requirements as a means to regulate sensitive industries such as debt collection. This type of surety bond holds the bonded party (in this case the debt collector) financially responsible for violating state laws governing where, when, why, how, and to what extent someone may legally collect a consumer debt. If they violate those laws and it results in damages for an individual, that person or the state agency responsible for regulating debt collectors may file a claim against the surety bond seeking financial compensation equal to the damages. For example, if a debt collector manages to collect a larger sum than a debtor truly owes, the person negatively affected may file a claim for the extra amount paid. Provided that the claim proves to be true following an investigation, the surety agency that backs the bond automatically settles it in full. After settling, the surety agency uses whatever legal means available to collect the amount of the settlement from the bonded party – the party that accepts financial liability for all valid claims as part of the surety bond agreement. Surety bond requirements like the one proposed in the most recent state budget discourage unlawful and otherwise negative behaviors by making it impossible for offenders to escape the damage and financial consequences that result from their misconduct. 

Who are the parties involved in a New York State Debt Collector Surety Bond?

Surety bond contracts involve an agreement between three equal parties:

  • Principal – The bonded party who pays to obtain the surety bond and pays to settle valid claims. The principal is the debt collector
  • Obligee – The surety bond holder who writes the requirements and has the right to file claims for damages. The obligee is the state agency that regulates debt collection. 
  • Surety – The agency that issues the surety bond to the principal and guarantees payment for valid claims to the obligee. The surety agency is only an intermediary: whenever it pays to settle a claim the principal must pay that debt back with interest and fees added. 

How much will a New York State Debt Collector Surety Bond cost?

The changes proposed in the 2021 state budget would require debt collectors to have a $25,000 surety bond to obtain a license and keep that bond in good standing to maintain their license. The dollar amount attached to a surety bond refers to the maximum total a surety agency agrees to pay out in claims. However, the surety bond cost (called the premium), is a small percentage of the total bond value – meaning it may only cost a few thousand dollars to meet the proposed New York debt collector bond requirements. How much an individual debt collector pays depends on their credit score and financial history. Scores below 700 or financial blemishes like a bankruptcy will result in more expensive premiums. However, bad credit doesn’t have to result in a denial or an exorbitant price with the help of Viking Bond Service. 

What is the status on the bill?

It passed when the legislature approved the Governor’s 2021 budget bill. Henceforth, all debt collectors throughout New York state will need to obtain and maintain a surety bond as part of the professional licensing requirements. 

What’s the next step for debt collectors?

Since it’s now illegal for debt collectors to operate without a license or a surety bond, finding a surety agency to partner with is the next step. Find one that’s able to write New York debt collector surety bonds, which may be difficult since this type of bond is brand new. Applying for a surety bond involves completing an application, submitting a copy of the surety bond requirements, supplying a financial statement, and agreeing to a credit check. The surety agency will then quote a price for the premium. Upon receiving payment, the surety bond activates for 12 months, and the bonded party receives a document proving they’ve met the New York debt collector surety bond requirements. 

Viking Bond Service for New York Debt Collector Surety Bonds

Surety bond requirements shouldn’t be a hassle or a financial obstacle for New York debt collectors. That’s the philosophy of Viking Bond Service: A nationwide surety agency that moved quickly to start issuing New York debt collector surety bonds. Get yours by completing our online bond application. Or get more information first: you can call our team of bond experts at 1-888-278-7389 or contact us through the form on this page.

Vermont Marijuana Surety Bonds: What You Need to Know

Surety bonds play a large role in the emerging marijuana industry, in Vermont and across the country. If and when a business needs a Vermont marijuana bond to operate legally, problems with the surety bond could lead to serious problems with the business. That’s why it’s important for everyone involved with growing, processing, distributing, testing, and selling marijuana in the Evergreen State to understand how surety bonds work and what a Vermont cannabis bond might mean for their business. 

A Brief History of Vermont Marijuana Laws

Like most other states of the era, Vermont banned cultivation, sale, and usage of marijuana in 1915. That ban stood for decades until Vermont became one of the earliest states to pass laws permitting medical marijuana. Decriminalization followed in 2013, and seven years later Vermont a bill to legalize recreational marijuana sales in 2020. Notably, Vermont was the first state to authorize adult marijuana use through the state legislature rather than through a ballot initiative. 

Who can legally sell medical or recreational marijuana in Vermont?

At the time of writing, Vermont was still working out the details of how it will tax and regulate recreational marijuana sales. However, it’s all but certain that businesses involved will need a state license. Among the requirements for getting a Vermont marijuana license could be the need for a surety bond. This has been the trend in other states, with overall positive results, and there’s no reason to think Vermont will proceed differently. 

Why do businesses need a Vermont Cannabis Bond?

Vermont marijuana bonds are just one example of a type of surety bond known as a license bond. Many professionals need to obtain a license to operate their business legally. All states require people seeking certain types of licenses to obtain a surety bond first. The reason is that surety bonds protect the public at large and the regulators responsible for individual industries from the risks created by unlawful or unethical businesses. 

To understand how and why, it helps to quickly rundown how surety bonds work. If a marijuana-related business breaks Vermont state laws relevant to the industry, any parties hurt by those actions may file a claim for damages against the surety bond. They are guaranteed payment by the surety agency that backs the bond provided that everything in the claim is true. After paying, the surety agency directs their focus to collecting the amount of the settlement, plus interest and fees, from the bonded party, in this case the marijuana-related business. Under the surety bond agreement, the bonded party has financial liability for all valid claims. The surety agency guarantees injured parties receive payment, but they never accept financial liability. Essentially, surety bonds hold the bonded party accountable for their mistakes. 

Which is why Vermont and other states use them to regulate a number of different industries. Surety bonds create a financial disincentive for businesses to break the law or exploit the public. They also create a mechanism through which anyone affected by misconduct can pursue, and likely receive, financial compensation proportional to the damage caused. Ultimately, surety bonds are good for all involved because a trustworthy marijuana industry where bad actors are held responsible can only lead to higher sales for marijuana businesses. 

Who are the parties involved in a Vermont Marijuana Bond?

Unlike insurance or loan agreements that typically involve just two parties, all surety bond agreements involve three:

  • Principal – The bonded party, responsible for obtaining the surety bond and paying for all claims. 
  • Obligee – The surety bond holder, responsible for writing the surety bond requirements and given the right to file claims.
  • Surety – The surety bond agency, issuing bonds to the principal and settling claims with the obligee. When the surety settles, the principal must repay the debt. 

How much does a Vermont Cannabis Bond cost?

Everyone pays a different price for a Vermont marijuana bond. The cost (called the premium) depends first on the type of marijuana bond: different aspects of the marijuana industry (testing facilities vs dispensaries etc.) will have different bonding requirements. As part of those requirements, state regulators will define how large a Vermont cannabis bond someone needs to obtain – eg. a $10,000 bond or a $25,000 bond. The dollar amount refers to the maximum amount the surety agrees to pay out in claims. Premiums are only a small percentage of that maximum amount, meaning a Vermont marijuana bond valued at $10,000 might cost just a few hundred dollars to obtain. The surety bond applicant’s credit score and financial history determine the exact premium cost. People with bad credit will typically pay more – but with the right surety agency in their corner, one like Viking Bond Service, they won’t be denied a bond or even asked to pay substantially more. 

Why Viking Bond Service for Vermont Marijuana Bonds?

Viking Bond Service is a partner to all businesses involved with the Vermont marijuana industry. We have the resources to make bonding fast, simple, and affordable for everyone we work with. To get a quote for a Vermont marijuana bond is as little as 24 hours, submit an online bond application at your convenience. If you have questions or need more information, our team is eager to help – contact us through the form on this page or call us at 1-888-278-7389.

What to Have When Applying for a Performance Bond

performance bond holds a contractor or construction company financially accountable when it fails to meet the performance standards outlined in a contact. For example, if a contract specifies that work must be complete by a certain date and it’s not, the project owner may file a claim against the performance bond seeking compensation for damages resulting from the missed deadline. Project owners often include performance bond requirements in work contacts to protect themselves from the risk of contractors who don’t live up to expectations. If you frequently bid on construction projects, you will likely need performance bonds multiple times throughout your career. They’re an integral part of your business, and something you can’t bring in revenue without. Given the stakes, it’s important to understand the performance bond basics and secure a performance bond as soon as possible if and when project owners require one. Avoid unnecessary setbacks and delays by preparing all the necessary documentation in advance. Here’s what you will need:

Financial statements

Expect any surety agency you apply for a performance bond with to ask for some level of financial statements. The size of the bond will generally dictate how extensive the requirement for financial statements will be. For smaller bonds they surety may only need a glimpse into the principal’s financial picture. For larger or higher risk bonds the surety may ask for multi-year and/or CPA involved statements. Your contract bond specialist at Viking will be able to guide you through this process. These statements are a formal record of business activities over a one-year period and they provide objective evidence of that business’s strengths and weaknesses – which is exactly why surety agencies ask for them. When you apply for a performance bond, underwriters (risk assessors) inside the surety agency go through a careful process to evaluate how likely you are to underperform, cause claims, and leave debts unpaid. One way they make that determination is by looking at your business’s past record and future prospects. If your business is less than two-years old or you are otherwise unable to provide the required financial statements, speak to the surety agency about a possible alternative. 

Copy of the contract that the performance bond is linked to

Another way that underwriters evaluate risk is by examining the terms of the contract the performance bond is linked to and then comparing that to the resources of your company. To return to our previous example, if a contract called for a specific completion date that a contractor clearly lacked the staff or equipment to meet, that would make a bond seeker especially risky and give surety agencies second thoughts about bonding them. Be prepared to provide a full copy of the contact, including the exact language of the performance bond requirement and the details of performance mandated. 

Application with the surety company

With performance bonds as with all other types of surety bonds, you will need to complete a standard bond application. Anyone else with an ownership interest in the business will need to complete an application as well. Be ready to supply details about your background, finances, and business interests. In most cases, applications take just a few minutes to complete. 

Real estate or other collateral owned by the contractor

Depending on the surety agency you work with and the specifics of the project you need a bond for, collateral may be involved. Collateral works like a security deposit – you put up something valuable upfront which the surety agency can use to settle claims or return to you if no claims are filed. The surety agency will decide what kind of collateral it will accept. Real estate is the most common form, but other valuable fixed assets like heavy equipment may also suffice. A certificate of deposit or irrevocable letter of credit might also be acceptable. Keep in mind that not all performance bond requirements stipulate collateral, and even when they do, the collateral costs you nothing as long as you avoid claims. 

Viking Bond Service – Performance Bond Specialists

If you need a performance bond, you likely need other surety bonds commonly associated with construction projects: bid bonds, warranty bonds, supply bonds, payment bonds, subdivision bonds and the list goes on. The point is, bonding plays a big role in your business. That’s why you need a reliable bond partner. 

Viking Bond Service is a nationwide surety agency issuing performance bonds along with all other construction bonds. Count on us to offer the bond you need. We also work with bond applicants who have bad credit and often find them competitive rates when other agencies have turned them down. We strive to make bonding fast, easy and affordable for everyone we work with – the first time and every time after. That’s how we’ve become the go-to surety bond source for contractors across the country. 

Are you ready to get a performance bond now? If so, get started on the online application. Do you have questions or need more information first? Our team is here to help – contact us through the form on this page or speak directly to a surety bond specialist at 1-888-278-7389.

Important Documentation Needed to Get a Surety Bond

You may need to get a surety bond before finalizing a contract, earning a professional license, or starting a business. In all cases, speed matters. You can’t accomplish your objective until you can prove you have the necessary surety bond. Therefore, you need to learn the surety bond requirements and complete the surety bond application process without delay. Learn how to get a surety bond and avoid unnecessary obstacles and setbacks by getting all the surety bond documents you will need in advance:

Financial Statements

Financial statements help underwriters (risk assessors) at the surety company evaluate your past and present financial situation. Underwriter’s whole goal is to decide how likely a surety bond applicant is to cause claims against the surety bond and how likely they are to pay the surety company back for those claims. Financial statements, along with the rest of the documents on this list, help to make that determination accurately. 

For businesses with under $20 million in revenue, you will need to provide a financial statement from the previous year (a tax return will not suffice) including an income/balance sheet and a schedule of receivables and deliverables. Underwriters will also need an ongoing compilation for the current year to evaluate your financial position at the same moment when seeking a bond. 

In addition to the financial statement for the company, underwriters will need financial statements from the major shareholders, evidence of business and personal tax filings at the state and federal levels, and a bank statement and letter of reference from the bank.

Businesses with revenues over $20 million can, in most cases, provide just a copy of a reviewed or audited financial statement from the previous year. 

Bond Agent Questionnaire

As part of the surety bonding process, every surety bond agent develops a questionnaire to get a better understanding of bond applicants. The questions are always different, but usually they ask for a Tax ID number, the state of incorporation, and the current number of employees. 

References

When applying for a surety bond, references give underwriters independent confirmation that your business is trustworthy and in good standing. If someone offers to write you a reference, the thinking goes, then your business must be capable of meeting expectations and delivering satisfactory work. To a certain degree, the contents of the reference matter less than your ability to obtain one. A business that couldn’t find anyone to refer them would be a large red flag for underwriters. It can take a while to get the references you need, so make this part of the surety bond process your first priority. Send a reference request to your most enthusiastic customers/suppliers, then get started on everything else while you wait for the response. 

Certificate of Insurance

You will need to ask your insurance company for a certificate of insurance (COI). This document certifies that you have the insurance coverage mandated in the work contract or under the license agreement. Here again, underwriters use this document to establish whether your business works within the boundaries of the law – suggesting you will also work within boundaries of the surety bond requirements.

Work in Progress (WIP) Form

Underwriters are trying to evaluate the strength and sustainability of your business overall. But they also need to investigate whether you have the resources to complete specific projects. After all, a company with a sterling track record could quickly become overleveraged and start breaking contacts and generating surety bond claims. A work in progress form details all the jobs you’re working on now, all the jobs you have in the pipeline, and all the jobs completed over the previous year. Include details of any other surety bonds you have as well. 

Resumes for Key Personnel

All it takes is one employee to do something that leads to a claim on the surety bond. To get a closer look at your employees, particularly those in leadership or project management positions, underwriters may ask for resumes from key personnel. This requirement isn’t a universal part of the surety bond process, but it’s something you should be willing and prepared to provide. Include a full employment history in each resume along with any notable credentials and accomplishments. 

Viking Bond Service – Your Surety Agency

As you can see, it may take a day or two (or longer) to prepare all the necessary documentation. Make sure to get started as early as you can to account for any setbacks. Just as important, make sure to work with a surety agency that makes applying easy, efficient, and extra fast. 

Viking Bond Service removes the roadblocks and speeds up the surety bond process so that you don’t have to waste time waiting to get a surety bond. When you apply, you will typically receive a quote within 24 hours. Pay the premium and then your surety bond requirement is met! Our underwriters will ask for some or all of the documents outlined above, but we use a simple, straightforward process that’s open to applicants regardless of bad credit

If you have questions about specific surety bond requirements or about the surety bond process overall, our team has answers. Contact our surety bond experts and get expert information at no cost or obligation to you. Submit your questions through the contact form on this page, or speak directly to a team member by calling 1-888-278-7389.

Florida Auto Dealers: Why You Should Renew Your Bond Now

Bond renewal season is upon us. If you’re an auto dealer in Florida, you will likely receive a bond renewal notification sometime in December. Maybe this is the first time you’ve renewed a Florida motor vehicle dealer bond or maybe it’s the 40th time. Either way, you need to act fast to get the renewal process started. 

Auto Dealer Bond in Florida: Why Renewals Matter

If you’re like most motor vehicle dealers in Florida, you only think about your surety bond once a year – when the renewal notice comes. Much like insurance, unless you’re having issues related to the surety bond, it’s not something that requires much time and attention. Also like insurance, a Florida motor vehicle dealer bond is something every business involved with auto sales must have to continue operating legally. To put it differently, surety bonds may not consume much of your time or attention – but they’re critical to the success of your business. 

As you might remember from the early days of your auto dealership, Florida requires anyone seeking an auto dealer’s license to prove they have an auto dealer bond and to keep the bond active and in good standing for as long as they remain licensed. Failure to renew a bond on time or at all would violate the terms of licensure and, potentially, lead to a loss of license. Continuing to sell vehicles without a license would mean fines and fees at best, but it could lead to a permanent loss of license and even jail time in extreme circumstances. To make the stakes starkly clear: Missing a bond renewal could lead to the permanent end of an auto dealership. 

When to Renew an Auto Dealer Bond in Florida

Going even one day without the required surety bond exposes a car dealership to risk and liability. That’s why surety agencies send out renewal notices well in advance of the surety bond’s expiration date (at least the good agencies do). Whenever that renewal notice arrives – which for many auto dealers is at the end of the year), don’t throw it in a stack of things to deal with later. Instead, start the renewal process ASAP, ideally immediately. Frankly, surety bond renewals are easy to forget about in the hustle and bustle of a business, but the risk of a missed renewal is too high to ignore. If you’re reading this now, it’s probably a good time to get the renewal process rolling.

How to Renew an Auto Dealer Bond in Florida

Renewing a surety bond works largely the same as obtaining one in the first place. But it also works differently than many people expect. Rather than paying the same premium you did the previous year or paying a standard renewal fee to keep the bond active, you will pay a new premium based on any changes to your credit or business standing over the previous 12 months. 

It works like this: After receiving your surety bond renewal notice, you will fill out a standard bond application with information about your background, finances, and business interests. Anyone else with an ownership stake in the business will also need to complete an application. Then, based on the application(s) and the results of a credit check, underwriters at the surety agency will assess the risk of bonding you and calculate a custom premium price. If your credit score has declined, you will likely pay more than you did last year, but the reverse is true if your credit has improved. 

Once you pay the new premium price, the Florida motor vehicle dealer bond renews for another 12 months. You will then receive a document to prove you have an active surety bond when renewing your auto dealership license. Without this document, license renewal isn’t possible. 

Viking Bond Service – A Partner to Florida Auto Dealers

If you currently rely on Viking Bond Service for an auto dealer bond in Florida, expect the renewal process to be fast, simple, and straightforward. We’ve spent a long time fine-tuning this process with feedback from users. If you have a surety bond through another agency, keep in mind that you don’t have to renew – you also have the option to let the bond lapse while switching to work with a different provider. 

Viking Bond Service issues every variety of auto dealer bond in Florida and works with vehicle sellers in all parts of the state. Unlike many other surety agencies, we also go above and beyond to serve bond seekers with bad credit. Count on our service-oriented team to make obtaining or renewing the exact bond you need a painless process. 

If you have questions about renewing surety bonds or switching surety bond agencies, we have the answers. Contact us through the form on this page or by calling 1-888-278-7389.

Different Types of Contract Bonds

There are many different types of contract bonds, and even though they all share the same basic mechanics, each one works a little differently. In this blog post, we will run down the most common types of contract bonds and show you where to find more information about them all.

What is a Contract Bond?

A contract bond is basically a way to hold someone accountable when they violate the terms of a contract. When that happens, the other party in the contact may file a claim against the contract surety bond. As long as the claim is true – meaning the party at fault violated the contract as the claim asserts – the surety company that backs the bond pays to settle the claim. Under the terms of the bond agreement, the party that caused the claim by violating the contract has the final financial responsibility for all claims. Therefore, even if they have been unable or unwilling to pay for claims before, they must pay the surety back for any settlement. Contract bonds are a way to hold one party responsible for violating a contract and provide the other party a guaranteed way to seek damages. 

What are the Different Types of Contract Bonds

Contract bond is a blanket term used to describe many different types of bonds in construction contracts or other industries. Bond seekers commonly need multiple types of contact bonds at once, and need different packages of bonds throughout their career. Common types of contract bonds include:

  • Bid BondsThese bonds hold someone accountable if they win a bid to complete a construction project and then pull out of the project before it begins. 
  • Construction BondsThis is another catchall term for a suite of contract bonds. Before starting a new project, contractors and construction companies often need to obtain all of these bonds: bid bonds, performance bonds, payment bonds, and (possibly) warranty maintenance bonds. 
  • Payment BondsIf someone fails to pay their suppliers or third-party contractors, the injured parties can file a claim against this bond to recoup lost payment. 
  • Performance BondsWhen a contractor or construction company fails to meet performance standards mandated in a contract – to finish by a certain date, to keep costs below a specific threshold, to maintain precise quality standards etc. – these bonds allow the other party in the contact to seek damages. 
  • SBA Bond Guarantee ProgramThis isn’t a type of contract bond but rather a program from the Small Business Administration (SBA) that helps entrepreneurs secure bonds they couldn’t have otherwise. 
  • Subdivision BondContractors hired to perform work inside of a subdivision may need one of these bonds, which hold contractors liable when their work falls short of expectations. A subdivision bond can also be called a developer bond, land improvement bond, or plant bond. 
  • Site Improvement BondSimilar to a subdivision bond, a contractor may need a site improvement bond before performing work on an existing land site. The bond protects the site owner from a contractor’s faulty work. 
  • Supply BondCompanies that supply goods and materials for construction projects may require this bond, which holds them responsible if a delivery of goods is not up to standards.  
  • Timber Sales BondIf a company intends to clear lumber from public land, they will need a timber sales bond stating they will take responsibility if their actions step outside the boundaries of a contract. 
  • Warranty/Maintenance BondThis bond applies to contractors and construction companies that agree to provide ongoing maintenance services or warranty protections. If they fail to deliver as promised, the other party may seek damages through the bond. 

Who should get a Contract Bond? 

Anyone required to do so according to the terms of a contract. When a contract requires a bond, the agreement isn’t final until the principal (the party required to get the bond) proves it has met the requirement. Different types of bonds in construction contracts can make or break a deal, so it’s crucial to comply with the bond requirement. As a nationwide surety brokerage issuing all types of contract bonds (including all the types outlined above), we can help you meet your bond requirements fast and in full. 

How to Apply for Different Types of Contract Bonds? 

In all cases, applicants must fill out a standard bond application, submit to a credit check, and supply a copy of the bond requirements specified in the contract – plus turn over any additional documentation the surety asks for. The surety will then quote a price for the bond, which the principal needs to pay to activate the bond. 

Viking Bond Service – Your Source for Contract Bonds

Rely on Viking Bond Service for any and all of your contact bonds. We can quote you a price in just 24 hours, and we are happy to work with bond seekers who have bad credit. Count on us to streamline the bond process and get everyone a competitive rate. Request a quote at your convenience. Or speak to one of our bond experts by calling 1-888-278-7389 or by sending your questions through the contact form on this page.