What is a Travel Agency Bond?
Many people today enjoy planning their vacations with a travel agency. It can take so much hassle and worry out of the entire process, so they are free to just anticipate their days of relaxation. Many states require a travel agency to obtain a bond before they can become licensed to work with the public.
This offers an assurance to the state agency as well as travel agency clients that the money they are investing into a dream vacation is used appropriately.
The travel agency is responsible for putting together vacation itineraries for clients with the money that they receive. Failing to do so through mishandling of funds or deliberate fraud leaves the client without a dream vacation or the money needed to plan another one. Having this bond means that the client is protected.
How does a travel agency bond work?
A travel agency bond is a type of surety bond. With all surety bonds, there are three key entities: the principal, the obligee, and the surety. The principal is the individual or business that needs to have a travel agency bond. The obligee is the state agency that requires a business to purchase the travel agency bond before becoming licensed. The surety is the company that guarantees that the principal will meet the terms of the bond.
If the travel agency does not fulfill its obligations to the client, then a claim is filed against the bond so that the client is compensated for their loss or damages. The surety agency will determine the validity of the claim and issue a payment to the complainant when it is necessary. This amount will not be more than the total amount of the bond. The travel agency will be liable for repaying any money to the surety company that has been paid out for a claim.
How much will I pay for a travel agency bond?
Each state determines the coverage requirements for travel agency bonds. You will pay a small percentage of that amount as a premium to the surety company. For the most accurate quote, submit your information for a free quote, and we will get you started on the path to bonding your travel agency. Our licensed agents will help guide you through all of the steps so that you can meet your licensing requirements as soon as possible. We are ready to answer any questions you have about travel agency bonds and any other bonds you may need for your business.