California Handler of Farm Products Produce Dealers Act Bond
Know why this bond matters to your business and how to easily get one!
What is a California Handler of Farm Products Produce Dealers Act Bond?
The following persons are required to obtain this bond:
- License applicants who will have a control of farm products from a licensee or producer for the purpose of reselling the farm products
- License applicants who will buy or agrees to buy any farm product from a licensee or the producer of the farm product
This bond – mandated by Chapter 7, Division 20 of the Food and Agricultural Code of the State of California – will serve as a financial guarantee to the California Department of Food and Agriculture.
One of the provisions of the said law is for the licensee to pay the producer of farm products on time and in full.
If the licensee violates that provision and any of the provisions of the aforementioned laws, the person who will be affected by the violation of the licensee will be eligible to recover the amount lost through a bond claim.
How much does a California Handler of Farm Products Produce Dealers Act Bond cost?
For license applicants who have excellent credit scores, the bond cost will start at 1% of the bond amount.
The bond amount will be determined by the California Department of Food and Agriculture.
The minimum bond amount will either be $10,000 or 20% of the annual dollar volume of business based on farm product.
Check out what you need to pay by getting your FREE SURETY BOND QUOTE HERE!
How can I get a California Handler of Farm Products Produce Dealers Act Bond?
We’ve made the application easier for you. Simply follow this step-by-step guide:
STEP 1: Apply for this bond
If you’re ready to apply now, you may do so HERE!
STEP 2: Underwriting
We’ll ask you a few important information about your financial history, business performance history, and your credit score. An underwriter will carefully evaluate all these.
STEP 3: Bond execution
Once the underwriter is done with the prequalification process, you’ll be asked to sign the indemnity agreement. After that, the bond will immediately be issued and sent to you!
How does a California Handler of Farm Products Produce Dealers Act Bond?
A surety bond is an agreement among 3 parties, namely:
Principal – license applicant
Obligee – the State of California
Surety – Surety bond provider
This bond will protect the Obligee against losses if the Principal fails to pay the producer of farm products on time and in full, or violate any of the provisions of the aforementioned Code. The bond will remain void if the Principal fulfills all the required duties without any violation. If the opposite happens, the Obligee will seek compensation for the losses incurred by filing a claim against the bond. The Surety will pay the Obligee, but the Principal must reimburse the Surety after.