Happy spring to all and, did you remember your surety bond renewal? Whether you’re a contractor, a business owner, or a professional in need of surety bonds, understanding the renewal process is crucial to maintaining compliance and ensuring ongoing operations. Here’s what you need to know (generally) about surety bond renewals in April, including deadlines, requirements, and helpful tips to streamline the process.
It is essential to renew surety bonds promptly to avoid lapses in coverage. Potential consequences of letting surety bonds expire, i.e., legal liabilities, project delays, and financial losses, can impair both your short and long-term business success. A good example is the bar/tavern sector. After serving alcoholic beverages to minors and after-hours violations, failure to file the mandatory surety bond and license renewal documents is the most frequent cause of a license suspension. There can also be serious consequences for non-renewal of statutorily imposed bond requirements such as those associated with ERISA fidelity bonds.
The renewal process with a surety company is generally simple. Most bonds are considered “continuous obligations”, meaning that the bond continues with full force and effect until the surety cancels the bond. Others are considered “term bonds”, which must be renewed annually. If a specific surety bond requires underwriting review, the applicant may be required to provide a renewal application and financial statement(s) as part of the renewal quoting process.
The renewal period immediately preceding the anniversary date of a surety bond is also the appropriate time to discuss with the surety underwriter any possible claims that may be imminent and if there has been a change in the obligee’s bond form.
Surety bond renewal applications are generally the same as the original bond application however some renewals offer a “short form” renewal document which asks those questions needed to update the surety’s file. It is important to complete a renewal application or survey accurately. Most states impose a perjury penalty for false information, so truthful answers and accurate values on financial statements are imperative.
As we move through the year it is essential to prioritize the renewal of your surety bond to maintain compliance and protect your business interests. Understanding the renewal process, meeting deadlines, and communicating concerns with your surety underwriter can facilitate a smooth renewal process
Our team is here to support you every step of the way. Call (800) 373-2804, email Underwriting@SuretyOne.com or contact us through any of our instant messenger options on our website to ensure your hassle-free renewal experience.
