What is a Michigan Unemployment Bond?

Michigan Unemployment BondAny nonprofit employers and Indian tribes and tribal units applying to be reimbursing employers must file a surety bond before being able to reimburse employees for bills and other types of work-related compensation.

The Unemployment Bond ensures payment of unemployment benefits and expenses based on wages paid to former workers.

With authorization from the Michigan Unemployment Insurance Agency (UIA), non-profit organizations may become reimbursing employers. Also, “Federally-recognized Indian Tribes are considered reimbursing employers under the same terms and conditions as other reimbursing employers unless the contributing status is elected. Indian Tribes and Tribal Units are billed annually for unemployment benefits paid to former employees.”

This prerequisite is in line with the Michigan Employment Security Act 1 of 1936 or Michigan Unemployment Compensation Act.


What are the bond conditions?

  • The bond must be written by a Surety authorized to conduct business in the State of Michigan.
  • The Obligee is the Michigan Department of Licensing and Regulatory Affairs, Unemployment Insurance Agency Division.
  • If the Principal fully performs the term and conditions stated above, then the obligations under this Bond are void; otherwise, the obligations under this Bond shall remain in full force and effect.
  • The Surety may cancel this Bond upon 30 days written notice to the Michigan Unemployment Insurance Agency. However, such cancellation shall not affect any liability which has therefore accrued or been determined.
  • If there are any claims made under the bond, the Surety reserves the right to inspect the applicable records, books, documents of the Obligee, provided the Surety affords reasonable notice to the Obligee.
  • The bond must be good for the current year and two succeeding calendar years. All Expiration dates must be on December 31.


What is the bond amount?

The bond is requested for all non-profit employers whose reimbursing accounts with an annual gross payroll in excess of $100,000, pursuant to Section 13a(4) of the MES Act. Administrative Rule 421.601.

The bond amount varies and will be determined by the Michigan Unemployment Insurance Agency.

The cost of the bond is a percentage of the bond amount and will be set by the Surety. The cost is typically 1%-5% of the bond amount.


How can I obtain an Unemployment Bond?

Here’s a step-by-step bonding process that we have made easier so that you can get your bond in no time:


You must first apply for this type of surety bond. If you are ready to do this now, you may APPLY HERE!

Our expert surety bond agent will guide you through the entire process – from the time you have applied until the bond is issued to you.


Next, you will be asked to submit a few important information that our underwriter will need to assess. This includes your credit score to determine your bonding capacity.

Make sure to also get a copy of the BOND FORM, which can be obtained from the Michigan Unemployment Insurance Agency.

To avoid any delays, make sure that you have gathered the right information needed before submitting.


Once the underwriting process is done, we will immediately issue your bond and send it to you right away!

Ready to start? Contact us today!

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