California Voluntary Plan Guarantee Bond
Secure your business through this surety bond!
What is a California Voluntary Plan Guarantee Bond?
It is a security deposit required of every operator of a Voluntary Plan. This must be submitted to the Disability Insurance Branch, Employment Development Department of the State of California.
This bond is part of the approval process of the Voluntary Plan by the Director of the Employment Development Department. The bond will be used for the following purposes:
- To cover the potential liability of the Voluntary Plan.
- To reimburse the Employment Development Department if the employer fails to pay any assessments established in connection with the Voluntary Plan.
Once the Employment Development Department has approved the guarantee bond, the EDD will forward it to the State Treasurer’s Office for custody.
This requirement is in pursuance of Part 2 of the California Unemployment Insurance Code.
How much does a California Voluntary Plan Guarantee Bond cost?
The bond premium will range from 2% to 7.5% of the bond amount. The bond premium will depend on the operator of the Voluntary Plan’s credit score.
The bond amount will be determined by the Employment Development Department.
The minimum bond amount is $1,000.
Bond amounts that are more than $1,000 required by the California Unemployment Insurance Code will be determined by the following:
- Number of employees covered
- Size of the payroll
- Class of risks
- Financial standing of the employer
- Other relevant factors as determined by the Employment Development Department
The formula used to determine the minimum required bond amount:
Employers estimated taxable wages from the previous year X 0.5 X Current SDI Contribution
Rate = Voluntary Plan Bond Amount
Once you have determined your bond amount, you can find out what your bond premium will be by claiming your FREE SURETY BOND QUOTE HERE!
How can I get a California Voluntary Plan Guarantee Bond?
- APPLY FOR THIS BOND HERE
- Your application will immediately be processed once we have received it. We will contact you if we need further information or if you need to submit documents needed for the prequalification process. The following will be checked during the prequalification process:
- Your financial capability
- Your business or job performance history
- Your credit score
Our expert underwriter will carefully evaluate all three to attain the best credit decision possible. To avoid any delay, the information that you should submit should be organized and concise.
- Your surety bond will be issued and sent to you after the indemnity agreement is signed.
How does a California Voluntary Plan Guarantee Bond work?
The Principal (Voluntary Plan Operator) and the Surety (surety bond provider) will partner in assuring the performance of the former to Disability Insurance Branch, Employment Development Department of the State of California. The Principal is primarily responsible for fulfilling the bonded obligations required by the Code. Any person (Obligee) who will suffer damages due to the non-compliance of the Principal will be eligible to file a claim.
The claim will first be verified by the Surety before it is settled. Once the Surety has settled the claim, the Principal will reimburse the Surety for the payments made.
Ready to apply? START HERE!