What is a Polygraph Examiner Bond?
Polygraph examiner bonds are a subset of the broader license bond category that must be filed with the state government agency responsible for regulating polygraph examination in the examiner’s jurisdiction as a condition of licensure for most polygraph examiners or lie detection test administrators.
Polygraph examiner 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 a polygraph examiner bond, will also be referred to as the “surety company” or the “bond company”. Polygraph examiner bonds refer to the examiner as the Principal, the surety bond company as the Obligor and the government agency as the Obligee.
Why is a Polygraph Examiner Bond required?
Examiner’s 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 examiner breaking state polygraph examination regulations. The surety company provides the government a guarantee (the surety bond) that the customers of a licensed examiner will receive payment for financial damages due to a violation of the statutes and regulations pertaining to the polygraph examiner’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, examiners 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.
Polygraph examiner bond violations triggering a bond payout may include an examiner willfully making a false report concerning the results of a polygraph exam, providing lie detection tests without the proper licensure, or any material misrepresentation concerning the examiner’s license.
How much does a Polygraph Examiner Bond cost?
Polygraph examiner bonds generally cost 1% of the bond amount with a minimum of $100.
Example: South Carolina Polygraph Examiner Bond Cost
| Bond Amount | Premium Rate | Bond Cost |
|---|---|---|
| $5,000 | 1.0% | $100 |
Is a Credit Check Required for Polygraph Examiner Bonds?
Credit checks are not required for polygraph examiner bonds.
How does the wording in the bond form impact the cost of a Polygraph Examiner Bond?
The bond form is a tri-party agreement which defines the rights and obligations of the government agency (obligee), surety company (obligor) and examiner (principal). While many bond forms use similar language, each bond form can be customized by the government agency requiring the specific bond and may contain provisions that increase potential costs for the surety company, which will ultimately be passed on to the examiner via higher bond premiums, stricter underwriting or collateral. The primary text to consider in a polygraph examiner bond surrounds (1) aggregate limits, (2) cancellation provisions and (3) forfeiture clauses.
Aggregate Limits
Bond forms always specify the penal sum defined as the maximum amount of financial damages any single party can recover from the bond related to a single claim occurrence. Most bond forms also contain a clause which limits the amount of financial damages from all parties and all claims to a specific amount (“aggregate limit”), usually the same amount as the penal sum. For example, a $15,000 polygraph examiner bond with an aggregate limit of $15,000 will pay out no more than $15,000, regardless of the number of damaged parties or claim occurrences. Polygraph examiner bonds without an aggregate limit will be more expensive than a bond with similar coverage containing an aggregate limit.
Cancellation Provisions
Most bonds contain a provision allowing for the surety company to cancel the bond (“Cancellation Provision”) by providing a notice to the examiner and government agency requiring the bond with the cancellation taking effect within a set period of time, usually 30 days (“Cancellation Period”). Cancellation provisions allow the surety company to cancel the bond for any reason, but most often due to the examiner failing to pay premiums due, claim payouts, or material changes in the contractor’s credit score. Polygraph examiner bonds with no cancellation provision or cancellation periods greater than 30 days will be more expensive than a bond with similar coverage containing a standard cancellation provision.
Forfeiture Clause
Surety bond claims are paid by surety companies to damaged parties to reimburse that party for the financial loss incurred up to the bond penalty amount. Certain bonds contain a clause which requires the surety company to pay the full bond penalty to the damaged party, regardless of the actual damages incurred (“Forfeiture Clause”). Polygraph examiner bonds with forfeiture clauses will be more expensive than a bond with similar coverage that does not contain the clause.