New York Self-Insurer Diability Benefits Law Bond

Businesses are required to file a bond with the State of New York Workers' Compensation Board (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.

Self-Insurer Diability Benefits Law Bond

State/Jurisdiction:
Classification:

How much does the New York Self-Insurer Diability Benefits Law bond cost?

New York Self-Insurer Diability Benefits Law bonds typically cost between 2.0% and 10.0% 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
2.00%
5.00%
6.25%
10.00%

Is a Credit Check Required for New York Self-Insurer Diability Benefits Law 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 New York Self-Insurer Diability Benefits Law bond required?

Businesses are required to purchase and file a bond with the State of New York Workers' Compensation Board 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 New York Self-Insurer Diability Benefits Law bond work?

New York Self-Insurer Diability Benefits Law bonds must be issued by an insurance carrier admitted by the New York Department of Insurance. The insurance company issuing any surety bond, such as the New York Self-Insurer Diability Benefits Law 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 New York Workers' Compensation Board 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.