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Patient Trust Fund Bond

Patient Trust Bond

A patient trust surety bond, also known as a nursing home surety bond, is a type of surety bond used to help protect trust fund assets for a patient being cared for in a nursing home or some other sort of long term care facility. In the event that a care facility mishandles the protected assets, a claim can be made on the surety bond to help compensate for any losses caused by the action.

What is a Patient Trust Fund Bond?

A long term care facility is responsible for how it manages, accounts for and holds the funds deposited by its patients. The care facility is required to get a patient trust fund bond to comply with the rules governing the licensing of the facility. A type of licensing and permitting bond, a Patient trust surety bond adds a level of protection for the patient's funds that are managed by the care facility.

The patient trust bond provides a form of guarantee that the long term care facility will manage its fiduciary role with regard to its patients funds in a manner acceptable to laws governing these types of facilities. The patient trust bond provides a surety's backing of the care facility. The bond effectively says the surety believes the care facility will handle its responsibilities lawfully and if any actions occur to the contrary, the surety can be held financially liable in the form of a claim on the bond.

How does a Patient Trust Fund Bond work?

A patient trust bond is not an insurance product, even though some sureties are branches of insurance companies. Similarly to an insurance product, when a claim is made on the patient trust fund bond, the surety will determine the validity of the claim and make payment if the claim is deemed valid and/or no other solution can be presented. Unlike insurance products, the surety will seek repayment of the funds expended on a claim. The surety will attempt to collect the funds from the principal, the long term care facility.

The reason long-term care facilities require a bond is to build trust between their organization and whoever asks them to manage funds. There is a high degree of risk in an arrangement like this, and too many examples of mismanaged funds. Without a bond, it could prove to be very challenging for the victims of mismanagement to pursue justice and recover their losses - but not with a patient trust fund surety bond in place. Because of the bond, people have the means to pursue justice and a guaranteed way to secure compensation (as long as they have a valid claim). At the same time, bonds force financially negligent facilities to compensate their victims, and by holding them personally responsible, these surety bonds discourage fraudulent behavior and encourage the integrity of the entire long-term care industry.

Who should get a Patient Trust Fund Bond?

Patient trust fund bonds are typically needed to fulfill a licensing requirement at the state level. Nursing home bonds are usually required to be in force for as long as the care facility remains licensed. The owners of the long term care facility are the individuals who apply for the patient trust fund bond. Once the bond is received, it can be given to the agency administering the license. Patient trust bonds are only provided to fulfill the bonding requirement, meaning that someone not required to get a bond can't apply for one. For those who do require a bond, seek one out ASAP. Bonding is an essential part of the licensure process and can become an obstacle to opening and operating legally if not obtained promptly. Get a quote for a patient trust fund surety bond in under 24 hours with the help of Viking Bond Service.

Who are the parties involved in a Patient Trust Fund Bond?

Unlike an insurance policy that involves just two parties, there are three involved in a surety bond agreement:

  • The Principal - The principal is the bonded party and the party financially responsible for settling any claims. In this instance, the long-term care facility is the principal.
  • The Obligee - The obligee is the party that defines the bond requirements and has the right to file claims against the bond. In a patient trust fund surety bond, the patient is considered the obligee.
  • The Surety - The surety is the company that issues the bond and agrees to settle any claims filed against the bond. Even though the surety backs the bond, however, the principal must pay the surety back for any claims it settles with interest and fees added to the amount owed.

How much does a Patient Trust Fund Bond cost?

The cost of a surety bond can differ depending on the type of surety bond. Patient trust fund bond amounts are determined by the state's healthcare administration or other applicable agency. The cost of patient trust surety bonds is usually determined by taking the number of employees and/or the amount of funds held in trust by the care facility. Patient trust bond amounts vary from state to state as do the guidelines that determine them. The exact amount required is typically made clear by the state agency. The cost for that bond is a small percentage of the total amount. The exact amount depends on the credit history of the applicant. Applicants with low credit scores or blemishes on their financial record are considered higher risk. Therefore, they will pay more for a surety bond than applicants with stellar credit - but they won't necessarily be denied. Viking Bond Service strives to get everyone approved.

How are claims handled for Patient Trust Fund Bond?

Every claim goes through an investigation. Proving financial mismanagement can be difficult, so the surety may need to bring in legal or accounting experts to examine the merits of the claim. Provided that everything holds up under investigation, the surety pays the obligee the full amount of the claim up to the total value of the bond. Afterwards, the surety uses whatever legal means necessary to collect the settlement amount from the long-term care facility that holds the responsibility for the claims filed against it.

How to apply for a Patient Trust Fund Bond?

Obtaining a patient trust surety bond is usually a simple process. A bond application followed by a soft credit check are often all that is required to obtain a quote. If any additional information is needed, our agents will make that known right away. Patient trust fund bond quotes are usually obtained within a business day.

Viking Bond Service - A Better Way to Bond

The easiest way to obtain a surety bond is by working through a national surety bond company like Viking Bond Service. Rely on our in-house experts for information - you can reach them through the form on this page or at 1-888-278-7389. For an instant surety bond quote, complete an online application.

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