License and Permit Bonds: What to Know
You should make sure that before you start applying for the license & permit bonds that you
know which type you would require. There are numerous businesses that would be
required to get these, so you should do the research to figure out whether or
not your state requires one. These protect the consumers by ensuring that the
business is following all of the regulations and rules. If they aren’t, then
the consumer can file a claim against this.
Types
There are numerous types of license
& permit bonds that you might need to get depending on what type of
company you are running. Some of the businesses that need them to include the
following:
·
Contractors
·
Motor vehicle dealer
·
Collection agencies
·
Freight brokers
·
Money transmitters
·
Notary public
If you are working in any of these areas, then you should ensure
that you have the right coverage for your need. This would be there to cover
individuals in case anything happens so that you don’t need to pay out of your
pocket. Ask the experts if you are in doubt of whether or not you would require
one and if so, which type you would need to apply for.
Coverage Amount
Depending on what type of license & permit bonds you get there are different coverage
amounts and everyone is wondering how much they would have to pay. This really
depends on the state that you are going to be working in and how much coverage
you want. Most often you can get the coverage for around 1% of the full amount
that you want to be covered for, but it also depends on your credit score. If
you have bad credit, then you might have to pay out more for the coverage,
which can go up to 15% of the amount.
Not Insurance
Another thing that you should understand when it comes to license
& permit bonds is that they
aren’t in lieu of insurance. If a business wants to be fully covered, then they
would have a bond, insurance, and the required licenses. The bond means that
they were evaluated by a firm and were issued with one based on their work
experience as well as credit history. Make sure that you understand that this
isn’t insurance, which means that you would need to get that separately to
cover you for everything else.
Coverage Factors
Also, when it comes to getting your license & permit bonds there are a few
factors that the surety firm is going to look into. Not only are they going to
pull up your credit score to help determine how much of a percentage you would
need to pay, but there are other things as well. Some of the other things that
they look at include:
·
Former or pending
lawsuits
·
Bankruptcy filings
·
Former work experience
·
Status of any previous
bonds
Make sure that you know just what they are going to be looking
at so that you are prepared.
There is a lot that you would need to know when it comes to license
& permit bonds, including the various types that you can get. Also, you
should know how much you would need to pay for one so that you have the money
set aside. It is also important that you understand that this isn’t the same as
insurance, which means you also need to get that. You should also know the
various factors that the firm is going to look into when it comes to coverage,
such as your credit score, work experience and much more.
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