What Happens When a Surety Bond Expires
Typically, surety bonds have a limited duration and do not remain in effect indefinitely. Some things have a limited duration of operation and can be associated with an expiration date. Bonds have a term after which their effect may expire.
However, it is possible to renew bonds to extend their coverage beyond their original term. Before renewing a surety bond for your business, conservatorship or guardianship, or any other case, it is important to be aware of certain things that can help you navigate the process more effectively.
If your surety bond has expired, it means that you are no longer protected by the bond. To continue being covered, you will need to apply for a new bond without delay.
Renewing a bond may be necessary depending on the type of bond, such as guardianship, conservatorship, and other estate bonds. It may not be optional in some cases. The courts mandate the requirement of these bonds until they deem them unnecessary. When bonds need to be renewed, notices are typically sent out. The fiduciary is required to renew the bonds until they are released from their duties by the court.
Surety Bond Renewal
It is highly recommended that you initiate the process of determining whether the bond that you have for your particular business or case is renewable or not. This is the foremost step that you should take in order to ensure that you are well-informed about the status of your bond. It is highly recommended that you thoroughly review the terms of your bond agreement to ascertain whether provisions for renewal are included therein.
However, in the event that such information is not readily available, you may consider reaching out to the surety that is currently serving as the financial guarantor of your bond, or alternatively, the surety agency through which you initially secured the bond, to obtain clarification on whether your bond is indeed eligible for renewal.
It is important to bear in mind that the entity responsible for ensuring your compliance with the terms of a bond, known as your surety, may go to great lengths to ensure that you are aware of the impending expiration of said bond. In fact, it is not uncommon for a surety to provide notice of renewal requirements several months in advance of the expiration date, thereby providing you ample time to take the necessary steps to renew your bond.
It is highly recommended that you prioritize the renewal of your surety bond prior to the expiration of its term. By taking this proactive step, you can effectively mitigate the potential risk of experiencing a gap in your coverage pertaining to your particular case.
In the event that you neglect to renew a bond and consequently, a gap in coverage arises, it is possible that you may encounter a number of issues with regard to receiving payment for claims. In fact, it is even plausible that you may be required to undergo the process of underwriting once again.
It is of utmost importance to note that license bonds, in particular, may necessitate modifications, rewording, or alterations. It is an immensely relieving fact that surety bonds can be renewed well before the terms of the bond are up. Therefore, it is highly recommended that you take the initiative to commence the renewal process prior to the expiration of the term on your surety bond.
In the event that you possess a license bond, it is of utmost significance to be cognizant of the specific date on which your bond must be renewed. This knowledge will enable you to ensure that your bond remains valid and in good standing, thereby allowing you to continue conducting business operations without any legal impediments or complications.
In the event that you neglect to renew these particular bonds, it is plausible that your licensure with the state may lapse, thereby rendering you ineligible to continue practicing in your profession.