FAQs About Surety Bonds Renewal

FAQs About Surety Bonds Renewal

A surety bond has three parties involved in the process: Principal, Obligee, and Surety. The principal party pays for the bond and performs the service; the obligee is the one the service is being performed for; and the surety is the party that pays the obligee in case the principal fails to perform.

There are three main types of surety bonds: commercial, contract, and court. All surety bonds are issued for a set period of time after which they may or may not be renewed (as needed).

What You Need to Know About Surety Bonds Renewal

The process of surety bond renewal depends on the type of surety bond you’re dealing with. Here are a few commonly asked questions about bond renewals:

When does the surety bond need to be renewed?

Ideally, the surety bond should be renewed before the current term ends. If you wait until the last minute to renew your surety bond, the issuer may take some time to issue a renewal. In this case, there may be a period of time when you won’t have a valid bond. In case of bond cancelation, make sure to renew your license before the cancelation period ends.

What is the surety bond renewal process?

The surety company will start notifying you of the end of your current period 30-90 days prior to expiration. After that, you’ll be required to give your updated information to the surety company and take any extra steps required by the obligee to receive your renewal. Applying for a renewal before the term ends ensures a smooth transition.

How much does surety bond renewal cost?

The cost of renewal and the new terms are set after careful consideration and assessment of the prevalent market risks. If the market allows, you may even receive a lower rate upon renewal. The total cost depends on the changes in the principal’s credit score and personal finances. You can also apply for a discounted multi-year bond term.

What happens if I don’t renew my surety bond?

Understandably, despite the reminders from your surety company, you may not be able to renew your surety bond in time. If for some reason you’re unable to do so, you may be at risk of losing your license because most states need a bond to issue a valid license. You may also be required to pay hefty penalties. If a bond is essential for your business’s continued operations, make sure to renew your bond on time.

Person signing a courts bond in Los Angeles

Applying for A Surety Bond in Los Angeles

You must always choose a surety company with more than five years’ worth of experience in bond execution. If you’re looking for one online, Surety EZ is the place to go. Since opening its doors in 2001, the company has provided every kind of surety bond with a swift renewal process. Start today by filling out an application form. For inquiries, get in touch.

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