Minnesota Lottery Retailer Bond

Businesses are required to file a bond with the State of Minnesota State Lottery (the "Obligee") to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from a licensed business breaking licensing laws.

Lottery Retailer Bond

State/Jurisdiction:
Classification:

How much does the Minnesota Lottery Retailer bond cost?

Minnesota Lottery Retailer bonds typically cost between 1.5% and 5.0% of the bond amount depending on the personal credit, license history, and experience of the business owners and the surety carrier issuing the bond.

Credit Premium Rate
1.50%
2.00%
5.00%

Is a Credit Check Required for Minnesota Lottery Retailer Bonds?

Surety carriers will run a credit report as part of underwriting the bond because the business ultimately must reimburse the surety bond company for any claims made on the bond.

Why is the Minnesota Lottery Retailer bond required?

Businesses are required to purchase and file a bond with the State of Minnesota State Lottery to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from the failure of a licensed business complying with the provisions of licensing laws.

How does the Minnesota Lottery Retailer bond work?

Minnesota Lottery Retailer bonds must be issued by an insurance carrier admitted by the Minnesota Department of Insurance. The insurance company issuing any surety bond, such as the Minnesota Lottery Retailer bond, will also be referred to as the "surety company" or the "bond company". The business is referred to as the Principal, the surety bond company as the Obligor and the State of Minnesota State Lottery as the Obligee.

The surety company provides the Obligee a guarantee (the surety bond) that the customers, vendors and employees of a licensed business will receive payment for financial damages due to a violation of licensing law up the bond amount stated on the bond form ("penal sum"). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.