Discount Plan Organization Bond Overview
In some states, discount plan organizations need a surety bond. Read on to learn all about the bonding process.
- Purpose: To ensure discount plan companies uphold state regulations and operate ethically
- Who Needs It: Companies offering medical, travel or loan discount plans in certain states
- Required Amount: $5,000–$100,000
- Premium Rates: 1–10%, based on credit score
What Are Discount Plan Organization Bonds?
If you offer medical, travel or loan discount plans, you may need a surety bond to operate in your state. These bonds protect consumers against unethical business practices and ensure reimbursement if a company becomes insolvent.
How Much Do Discount Plan Organization Bonds Cost?
Most discount plan organization bonds cost 1–10% of the bond amount based on personal credit score. For example, qualified applicants can pay just $350 for the $35,000 Florida discount medical plan organization bond.
Required coverage amounts range from $5,000 to $100,000. Select your state below to learn more and apply for a free quote.
How Do Discount Plan Organization Bonds Work?
A discount plan organization bond creates a legal contract between these three parties.
- Principal: The discount plan organization filing the bond
- Obligee: The government entity requiring the bond
- Surety: The issuing surety provider
This bond is your financial guarantee that you’ll uphold all applicable laws and operate ethically.
If you break the bond terms, harmed parties can file claims. The surety will pay valid claims up to the full bond amount. However, you ultimately must reimburse the surety.
Who Needs a Discount Plan Program Bond?
The following types of discount plan programs need a surety bond to operate in select states:
- Discount Medical Plan Organizations: Companies that sell memberships offering discounts on medical, dental, vision or pharmaceutical services
- Consumer Discount Companies: Finance companies that provide small non-mortgage loans to borrowers with reduced credit
- Seller of Travel Discount Programs: Travel agencies that offer membership and discount programs
How to Get a Discount Plan Organization Bond
With SuretyBonds.com, you can apply for a free quote online 24/7. Simply select your state and provide your information through our secure online portal. We’ll run a soft credit check to determine your exact rate.
You’ll receive your personalized quote within one business day. Once you pay the invoice, we’ll email or mail your official bond form directly to you. You’ll then need to file the bond with the obligee.
How Do I Renew My Discount Plan Company Bond?
Discount plan company bonds expire annually. We’ll begin sending you reminders by phone and email 90 days before the expiration date. Simply pay the attached invoice to extend your bond for another term.
How Do I Update My Discount Plan Organization Bond Form?
Your surety company can typically make small changes to your bond form by issuing a bond rider. You cannot update the bond form yourself.
If you purchased your bond from us, email [email protected] explaining the needed change.
Can I Get Bonded with Bad Credit?
At SuretyBonds.com, we work hard to approve 99% of applicants through our Bad Credit Bonding Program. If you’re worried about low credit affecting your rate, you can also ask if you qualify for a premium financing plan.
