What is an Ignition Interlock System Bond?
Ignition Interlock System bonds are a subset of the broader license bond category that must be filed with the government agency (city, county, or state) responsible for regulating interlock installation activity in the installer’s jurisdiction as a condition of licensure for most ignition interlock installers. Ignition interlock systems are devices which prevent a vehicle from starting if the driver of a vehicle has been drinking alcohol. Courts often order individuals convicted of state driving under the influence laws (“DUI” laws) to install devices to monitor alcohol consumption of those drivers for a probationary period. Most states handle installer licensing directly, while others allow local municipalities to regulate and license ignition interlock installers.
Ignition interlock system bonds must be issued by insurance carriers admitted in the state where the government agency requiring the bond resides. The insurance carrier issuing any surety bond, such as an ignition interlock systems license bond, will also be referred to as the “surety company” or the “bond company”. Ignition interlock system license bonds refer to the installer as the Principal, the surety bond company as the Obligor and the government agency as the Obligee.
Why is an Ignition Interlock System bond required?
Installers are required to purchase license bonds by state and local statutes to protect a government agency by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from an installer breaking administrative rules regarding the installation of ignition interlock systems. The surety company provides the government a guarantee (the surety bond) that those ordered by the court to equip their vehicles with DUI interlock systems will receive payment for financial damages due to a violation of the statutes and regulations pertaining to the installer’s license up to a limit specified in the bond (“penal sum” or “bond amount”). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, ignition interlock systems installers 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.
Ignition interlock system bond violations triggering a bond payout may include an installer’s insolvency resulting in damages to a third party, failure to install an interlock system covered by product liability insurance, or installing a device which does not accurately measure the concentration of alcohol in the breath.
How much does an ignition interlock system bond cost?
Ignition interlock system bonds bonds generally cost 1% of the bond limit with a minimum premium of $100.00.
Example: $10,000 Ignition Interlock System Bond Cost
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Is a Credit Check Required for Ignition Interlock System Bonds?
Credit checks are not required for ignition interlock system bonds.