The state of Tennessee enacted a new health club law referred to as SB 3752. The new law requires health clubs to obtain a surety bond in the amount of $25,000 with the Department of Commerce and Insurance. SB 3752 states that if the clubs financial condition does not allow it to cover its financial responsibilities, the bond can be increased up to $200,000. The new law also allows the health clubs to sell memberships before they open; buyers have the right to make direct claims on the bond if the club does not open. This is one of two bills enacted in Tennessee for health clubs.
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Tennessee Health Club Bond
September 12, 2009 by Eric WeisbrotCategory: Commercial Bonds, Surety NewsTags: bond requirements, health club, health club bond, legislation, surety bond, tennessee, tn | Comments (0)
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South Dakota Trust Company Surety Bond Abolished
September 11, 2009 by Eric Weisbrot
There is a new law regarding trust companies in the state of South Dakota labeled SB 85. SB 85 modifies the law which requires that a fidelity bond, surety bond, or directors and officers insurance policy be acquired by trust companies for the safeguard of its fiduciary clients. SB 85 revises the original law so that both a fidelity bond and a D&O insurance policy will be required; the option of a surety bond is now eliminated.Category: Commercial Bonds, Surety NewsTags: bond requirements, legislation, SD, South Dakota, surety bond, Trust Company Bond | Comments (0)
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Tennessee Motor Vehicle Dealer (MVD) Bond Raised To $50,000
September 10, 2009 by Eric WeisbrotThe state of Tennessee enacted a new law referred to as HB 2809. The new MVD (motor vehicle dealer) law raised the amount of the required license bond from $25,000 to an amount of at least $50,000; it also prohibits the use of letters of credit. The present law allowing the use of a certificate of deposit was preserved. Category: Auto Dealer Bonds, Commercial Bonds, Surety NewsTags: auto dealer bond, bond requirements, dmv bond, legislation, mvd bond, surety bond, tennessee, tn | Comments (0)
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Stimulus Funds To Refund Surety Bond Premiums
September 9, 2009 by Michael Weisbrot
The Federal Stimulus fund will refund surety bond premiums for contractors ARRA transportation infrastructure contracts. “This new program, which will be administered by the Department of Transportation’s Office of Small and Disadvantaged Business Utilization (OSDBU), allows small and disadvantaged businesses to apply to be reimbursed for bonding premiums and fees incurred when competing for, or performing on, transportation infrastructure projects funded by ARRA. The program will be especially helpful for businesses with traditionally less working capital than larger contractors.”
The headline sure catches the eye, but how realistic is it? According to the site, only “small and disadvantaged businesses” can apply. When you read further down, it seems that they classify these businesses by their low working capital; one of the main items looked at when reviewing a contractor’s surety capacity.
Fortunately, it does allow the SBA bonded contractors to apply. However, SBA contractors’ bond lines are often reduced due to their lines of credit being reduced or terminated (SBA counts LOCs as working capital).
In other words, the government is willing to provide stimulus funds to refund contractors’ bond premiums, but only for contractors that don’t actually qualify for surety bonding.
Category: Contract Bonds, Surety NewsTags: premium refund, SBA, stimulus, stimulus package, surety bond | Comments (8)
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Connecticut Professional Employer Organization (PEO) Bond
by Lisa Grimsley
The new Connecticut amendment HB 5113, effective January 1, 2009, says that PEO’s (Professional Employer Organizations) need a working capital of at least $150,000 or they need to provide a surety bond, a letter of credit, or securities with a market value of $150,000. The surety bond is to ensure that the PEO will pay the taxes, wages, benefits, or entitlements if the PEO does not pay on time. If positive working capital is not shown on the PEO’s financial statements, then the bond must be for $100,000 plus an amount sufficient to cover the deficit of the working capital. The law also states that a covered employee is not an employee of the PEO for purposes of general liability insurance, surety bonds, fidelity bonds, employer’s liability, or employer’s liability insurance. Other states have used these provisions in the past few sessions as well.Category: Commercial Bonds, Surety NewsTags: bond requirements, connecticut, ct, legislation, peo bond, professional employer organization bond, surety bond | Comments (0)
