Who Needs a Bond Rider?
If you need to make changes to a previously purchased surety bond agreement that is still in effect, you have to purchase a bond rider. Buying a bond rider is the only way to make changes to the original surety bond agreement without invalidating it.
What Changes Can Be Made with a Bond Rider?
A rider can only be used to make certain changes. Sometimes a change is needed to correct a mistake that was made when the bond was issued, such as an incorrect address. Most often, though, the change is needed because of a change in the personal or business circumstances of the individual who purchased the bond (the bonded �principal�).
Changes that can be made to a surety bond agreement by purchasing a rider include:
-������ The term of the bond. For example, increasing it from one year to two.
-������ The bond�s required (penal) amount. For example, if the “obligee,” the party requiring the bond, miscalculated the penal amount for a sales tax bond that’s based on the prior year’s reported sales revenue.
-������ The principal�s legal name. This can be changed if misspelled originally or if legally changed through marriage or divorce.
-������ The principal�s legal address. For example, if a move occurred after the bond was purchased.
-������ The legal structure of the principal�s business. For example, from a sole proprietorship to an LLC.
As a rule, a rider cannot be used to change any of the original surety bond agreement�s terms, conditions, or guarantees. Although certain details can be corrected or updated by adding a rider, the basics of what is being agreed to cannot.
How Do You Get a Bond Rider?
A surety bond agreement is a legally binding contract between the obligee, the principal, and the company (the �surety�) underwriting and issuing the bond. To purchase a rider, you�ll need to submit an application to the surety you got the bond from. If your change request is one that can be honored, the surety will go ahead and issue the rider. The rider certificate can go to you to give to the obligee or can be sent to the obligee directly.
What Does a Bond Rider Cost?
While you paid an annual premium to obtain the surety bond, all you�ll pay for a rider to amend that bond is a small, flat fee�generally $25. Your personal credit score and financial situation don�t enter into the picture in this case. You�re essentially paying a fee for an administrative service, not entering into a new agreement.
Contact Us
Call us to discuss the change you need to be made to a surety bond you received from us, and we�ll see if a rider will do the trick.