What Is a Surety Bond Renewal?
A surety bond renewal is an extension of an existing surety bond term provided by a surety company.
All surety bonds have a valid term during which the surety company takes on the risk of the bond in exchange for a paid premium. When the term expires, businesses and individuals may require a surety bond renewal to maintain license requirements and/or avoid legal repercussions.
Before renewing your bond…
Here is a refresher on the three parties involved in a surety bond. You’ll see these terms used frequently:
- Principal: The individual or business that must obtain a bond as required by the obligee (i.e. you)
- Obligee: The entity requiring the bond, often the government agency in charge of regulating or licensing an industry (i.e. The California Department of Motor Vehicles)
- Surety: The insurance company that financially backs the principal’s bond by guaranteeing money is available to cover potential claims (i.e. SuretyBonds.com)
When to Renew a Surety Bond
The best time to renew a surety bond is at least 30 days before the renew-by date.
Many surety bonds have a set expiration date, while others are continuous. For bonds with a specific term length, the renewal period begins 90 days before the end of the current term.
Once your surety provider provides your renewal quote, renew your bond as soon as possible to avoid the risk of a lapse in coverage due to unexpected complications.
How to Renew Your Surety Bond
Your exact renewal process depends on the requirements set by the obligee. To renew a bond, the surety company will reevaluate the bond risk and provide an updated quote. Typically, the principal only needs to pay the new term premium, but sometimes supporting documentation is required.
The SuretyBonds.com Renewal Process
- Pay your premium online or over the phone
- Sign and submit any additional documentation, if required
- File renewal documentation with your obligee, if required
Watch this quick video to learn more about our bond renewal process:
Understanding the Four Types of Bond Renewals
The surety provider will process your renewal according to the obligee requirements and the details on your specific bond form. You can identify which of these four surety bond term types you have on your current bond form:
| Bond Renewal Type | What You'll Receive | Obligee Follow-up |
|---|---|---|
Term Bond | A new bond | File renewal bond with the obligee |
Continuation Certificate | A continuation certificate | File certificate with the obligee |
Continuous Until Canceled | No new documentation unless you switch insurance companies | No further action unless you switch insurance companies |
Continuous Until Released | No new documentation | No further action |
What Is a Continuation Certificate?
A continuation certificate is an official document issued by a surety company to formally renew a previously issued and filed bond. Some obligees require continuation certificates to verify renewal.
If necessary, SuretyBonds.com will deliver your continuation certificate once you pay your premium. Upon receipt, you’ll need to file it directly with the obligee.
What If My Bond Is “Continuous Until Cancelled?”
If your bond term is “continuous until released,” “non-expiring,” or “continues until cancelled,” you simply need to pay your renewal invoice and your bond remains active.
What if I don’t pay my renewal premium? You are still liable for the bond, including any potential claims, until the obligee formally cancels the bond.
More Surety Bond Renewal FAQs
How do I know if my surety bond is up for renewal?
If your bond is up for renewal, your surety provider will begin notifying you about 90 days before the new term is set to begin. To verify if your bond is eligible for renewal, you can check the term information on your original bond form or contact the obligee.
Or — for active SuretyBonds.com customers — our proprietary bond search tool can provide your specific renewal information.
Questions regarding bond filing acceptance should be directed to the obligee.
What if I don’t renew my surety bond on time?
If you do not renew a bond during its renewal period, your market will likely issue a notice of cancellation and your bond will be canceled before the new term is set to begin.
What happens when a bond expires?
If your bond expires and you have no further need for it, you don’t have to do anything (except for release-required bonds). However, if being bonded is part of your license requirements, continuing to operate without one could lead to repercussions, including:
- Lapse in coverage
- License suspension or loss
- Fines and legal charges
If you didn't renew a bond with us in time and need to maintain an active bond, email [email protected].
What if I receive a notice of cancellation?
When a surety company cancels a surety bond, they'll usually mail a notice of cancellation to the obligee. A surety company may cancel for several reasons, including:
- Bond claims
- Non-renewal by the principal
- Need to switch to surety market
If your bond is canceled due to non-renewal, most markets will reinstate a bond if you pay the renewal premium within 30 days. If your bond was moved to a different market because of availability or a better rate, the old bond must be canceled before the ‘new’ bond can be filed.
How much will my surety bond renewal cost?
Surety bond renewal prices are often similar to the original cost. However, your premium cost may change year over year. Here are some of the most common factors impacting renewal costs:
- Risk: How likely are bond claims based on the market and the individual applicant?
- Bond amount and term: Does the bond amount or term length need to be updated? The premium will adjust accordingly.
- Credit score: Has the applicant's credit score improved or decreased significantly? Credit score is one of the most important factors influencing bond price.
How can I get a better rate at renewal?
SuretyBonds.com represents the country's top surety markets. We start shopping for the lowest premium rate 3-4 months before your renewal. If your credit score and financial situation have changed, you may qualify for a cheaper rate.
You can also save time and money by selecting a multi-year term discount on select bonds.
What does it mean if my bond requires a release?
If your surety bond requires a release, it can only be canceled if the obligee closes the bond. You must renew your bond and pay the premium until the obligee provides official release documentation.
We see this most often with court bonds for estate representatives or legal fiduciaries. The court needs to release probate bond principals from their legal obligation. Then, the surety can cancel the bond.
How do I update my renewal bond with new information?
If your SuretyBonds.com bond is in its renewal period, you can update your account information when reviewing your renewal invoice. Any online change request will prompt us to review and send a new invoice for verification.
If you need to update the information on a current bond form that's on file with the obligee, we’ll issue the appropriate documentation and provide instructions.
How will I receive my bond renewal documents?
Once you pay your renewal invoice, we'll typically process your file within one business day or less. You'll then get a confirmation email with instructions on how to finalize your renewal with the obligee.
Physical Delivery
If the obligee requires raised seals and wet signatures, we’ll ship the bond renewal documents via FedEx and provide a tracking number. You can then submit the documentation to the obligee.
Digital Delivery
If your obligee accepts a digital seal and facsimile signature for the surety company, we’ll email your renewal documents. You must then print, sign, and physically deliver the documentation to the obligee. The majority of our bonds are delivered digitally.
Renew Your Surety Bond Today
Whether you need to renew your surety bond or apply for a new one, SuretyBonds.com is here to help. As the surety industry leader, we offer the quickest and easiest path to get bonded.
Have more surety bond renewal questions? Contact our friendly surety experts today. Call 1 (800) 308-4358 or email [email protected].
