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A Florida surety bond guarantees principal owners and the public that services will be performed with excellence and security. Florida legally requires a variety of contractors and organizations to secure bonds to conduct business across the public service industry. Single Source Insurance is a leading Florida bonding company. Apply easily online and take advantage of lowest rates. Browse the most common types of FL surety bonds, or contact us for a full list.
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What Are Termite Bonds?
Termites love Florida�the climate is ideal for them. Mortgage lenders typically require a termite inspection and treatment if signs of termite infestation are found. Most insurance companies don�t insure homes for termite damage, so homeowners and lenders have a vested interest in making sure a house is termite-free when it is changing hands.
Termite bonds are different from most surety bonds in that they are purchased voluntarily by pest control businesses. No government agency, licensing board, or other entity mandates them. A termite bond is a legally binding contract between a pest control business and a customer guaranteeing:
In some cases, a termite bond also covers the cost of termite damage incurred while the bond is in effect.
Under Florida law, sellers are required to disclose any known problems with the property, but there is no legal requirement for a termite inspection. However, many lenders won�t approve a mortgage application without a termite inspection report showing that there is no current termite infestation. Consequently, real estate agents sellers encourage people inquiring about listing their home for sale to get it inspected for the presence of termites and termite damage so as to prevent delays in closing a sale.
Pest control businesses typically buy a pest control bond for each customer purchasing termite inspection, treatment, and control services. Being able to offer bonded services is a significant marketing advantage. It�s tangible evidence of a company�s commitment to quality and customer service.
Termite inspections often are scheduled because a home is about to be sold. In the typical scenario, the seller will have the property inspected and, if a problem is detected, will have the house treated. The pest control company will purchase a termite bond that guarantees additional scheduled inspections, re-treatment, and possibly damage repair as needed in the future. It�s important that the bond is transferable to the new homeowner.
A termite bond is purchased from a surety bond company and usually has a duration of two years. The terms of the termite bond agreement spell out the guarantees being made by the pest control company, such as the number of re-inspections the homeowner is entitled to.
The agreement also states that the homeowner will not be charged for the treatment of re-infestations occurring after the initial termite treatment. The homeowner may be entitled to free repair of property damage resulting from a re-infestation.
If the homeowner submits a claim against the termite bond, the surety company that issued the bond most likely will pay the claim upfront and then collect reimbursement from the pest control company.�?This is a common practice that expedites payment to the claimant while giving the pest control company some time to come up with the needed funds.
The cost of a Florida termite bond varies depending on the amount of the bond and the risk the surety company is taking in extending short-term credit to the pest control business. The amount of the bond must be sufficient to cover the cost of all of the services the homeowner is entitled to under the terms of the bond agreement.
The surety company�s main concerns are the likelihood of claims against the bond and the pest control company�s ability and willingness to repay claims paid in advance. With a good track record in the industry, a high credit score, and financial stability, the surety bond company will assign the lowest possible premium rate, potentially as low as 1%.
Request a convenient online quote today, or call us to discuss the termite bonds that will help you grow your pest control business.
