Copyright © 2012 Surety 3: Designed By R. Dowston
What is Bail Insurance? Why do I need it?
Many states require bail agents to prove that they will be able to pay for forfeited bail
bonds. Often times this is required in bond form. Bail insurance is essentially a large bond that shows the court a bail agent will
be able to pay smaller bail amounts in full. Both new and experienced bail agents need bail insurance unless they have the monetary
means to underwrite themselves and live in a state that allows bail agents to not be backed by an insurance company. Even if you have
the monetary means to show the court you can back the bonds you write, it may be wise to have bail insurance. Many bail insurance
providers provide additional benefits, such as a nationwide network of agents to work with.
What is a surety?
A surety is the
actual insurance company backing bail agents. Some sureties have managing general agents or general agents that manage and interact
with the bail agents directly.
What is a general agent?
A general agent is a registered bail agent that oversees an insurance
company's bail division. The general agent is responsible for communicating with, managing, and handling all the paperwork for the
insurance company. Essentially, the general agent acts as a go-between for the insurance company and the bail agent. The general agent
indemnifies the insurance company of liability in the case of forfeited bonds. Surety companies may use one large general agent or
may choose to use smaller, regionally located general agents.
What should I look for when choosing surety representation?
choosing surety representation, it is important to look at two factors: the contract rate and the value-added benefits. Essentially,
how much will you be paying, and what will the surety or general agent do for you? Surety companies generally offer a suite of added
benefits, such as discounts on agency management software or other corporate necessities, educational opportunities, and 24 hour support.
Each surety or general agent will offer different benefits for working with them - be sure to inquire what benefits you will receive
by working with a particular company.
What is a typical contract rate?
Typically, a surety or general agent will charge around
2% per $1,000 for each bond you write. The contract rate will vary, however, depending on the agent. Like car insurance, your rate
can increase or decrease based on the number of years you have been in the bail industry, your forfeiture rate, how much supervision
you require and more.
What is a BUF?
A BUF, or a build-up-fund, is essentially a savings account kept by the surety company. The
more money you have in your BUF, the lower your contract rate will be. Surety companies will take legal fees, recovery fees and more
out of an agent's BUF if necessary. While surety companies hold the BUF in trust, the account belongs to the individual agent. As
a general rule of thumb, 1% of each bond a bail agent writes is deposited into their BUF account.
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