Your Surety Bond May Expire on December 31: Surety Bond Renewal Reminder
It’s that time of the year again when many of the surety bonds are nearing expiration and need to be renewed. Just a reminder, as the Christmas holiday nears, many surety bonds are also scheduled to expire on December 31 so be sure to renew those bonds to ensure the continued operation of your business.
If you want to avoid the holiday rush and relieve yourself of unnecessary stress, please be sure to accomplish your surety bond renewal before the deadline and make sure that your business is in compliance with regulations.
A surety bond renewal is an extension of the surety bond term by the surety company. All surety bonds have a term for which they are valid and enforceable. This means that in exchange for the premium paid, the surety company is willing to take on the risk of the bond for a specified period.
If you have not heard yet from your surety bond about your need for surety bond renewal, then you can pick up your phone and dial your surety’s number and inquire about the renewal date of your bond. It is always better to come prepared. Just because you have not used your bond does not mean you don’t need to renew.
Indeed, that is all the more reason to renew your surety bond because it means you are complying with all the rules, regulations, and statutes in the conduct of your business that the need to use your bond has not risen. You may be surprised that because of the non-usage of your bond, your surety might even give you a lower bond premium.
Surety Bond Renewal and the Law
But the most important reason for surety bond renewal is because the law often requires that your business is bonded. Having said that, it is always wise to avoid a lapse in coverage and get your bond up to date and renew before its expiration date. If you allow your bond coverage to expire, the obligee (often a government entity) that requires the bond and regulates your business, can suspend your license and even revoke it if you allow the lapse to stay for a long period.
You might even be slapped with additional penalties, including fines if you continue to conduct your business without a current surety bond.
Surety Bond Renewal Process
During a surety bond renewal, a surety bond underwriter will repeat the process of assessing your business for any risk just like when you first applied for the bond. However, you may not be required to sign a new indemnity agreement or execute a new bond, unless required by the obligee. You, as the Principal of the bond, have to pay a new premium to complete the renewal of your surety bond.
Usually, the Principal is required by the underwriting surety to pay the renewal premium before the expiration date of the bond to guarantee continued coverage. The principal or the surety company then notifies the obligee of the bond renewal term and the bonding requirement for the license or permit is fulfilled until the next expiration date.
We are a full-service surety bond company that is built on a foundation of integrity. As a reputable partner for all your surety bond needs, Surety Bond Authority prides itself on stellar customer service and affordable rates. We provide our clients with competitive pricing with multiple national carriers as well as world-class support. For a free consultation about your surety bonding needs, don’t hesitate to contact us. You can also use our online platform for a free quote.