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Third Party Administrator Bond

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What is a Third Party Administrator Bond?

Companies that administer services for other organizations or businesses are known as third party administrators. These companies may handle claims for an insurance business or manage benefits for employees on behalf of an employer. Third party administrators in many states are required to have a surety bond in place to comply with licensing guidelines.

A third party administrator bond guarantees that licensed businesses administering services for other companies comply with regulations and rules relevant to the industry in which they work. This type of surety bond also helps ensure a third party administrator properly manages funds as part of its obligation to the business it serves.

Third party administrator bonds involve three parties. The principal is the third party administrator required to secure a surety bond. The obligee is the authority requesting the bond as part of the licensing process. Finally, the surety company provides the bond to the principal. If a claim is made against a third party administrator bond, the surety pays the claim and the principal repays the amount. For this reason, it is essential to keep bond claims to a minimum.

What Does a Third Party Administrator Bond Cost?

A third party administrator bond is priced as a percentage of the total bond amount. The percentage rate ranges from 1 to 5% of the bond amount for most third party administrators. For a $50,000 third party administrator bond with a 2% rate, the premium is $1,000. Your rate is based on several factors, including your personal credit and business financials.

If your credit is not strong or your business finances do not show a strong track record of responsible management, the percentage of the total bond amount you pay is likely to be on the higher end of the range.

How Do I Get a Third Party Administrator Bond?

You can start the process of securing a third party administrator bond by submitting a brief quote request online.

Frequent Questions

How much does this bond cost?

The cost is usually 1 – 10% of the bond amount. Keep in mind that pricing varies based on the bond amount, and your financial strength.

What is the process?

Apply and get approved on our website, sign the surety agreements, and we will ship the bond out. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.

Can I get this bond with bad credit?

Yes, it’s possible, but bad credit usually results in higher rates.

What if a false claim is filed?

You must contact us immediately, as we have a team of claim specialists here to find a resolution for you. Keep in mind, it is crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.

Are you looking for a different type of bond?

You can take a look at our full list of license and permit bonds.

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Jennifer Henson
Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
David Tillotson
Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.