Wyoming Private School Bonds
Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Wyoming private school bond needs.
What Are Wyoming Private School Bonds?
A Wyoming private school bond is a type of license and performance bond. The terms of the surety bond agreement require the school owner, known as the bond’s principal, to operate in compliance with Wyoming statutes and Wyoming Department of Education rules and regulations governing trade, correspondence, distance education, technical, vocational, business, or other private schools.
A private school bond provides financial protection for students if a school that they have already paid tuition to ceases operations. Students who have not received the full educational services their tuition entitles them to and have not received a refund from the school may be protected for losses up to the bond’s full $10,000 amount.
A Wisconsin private school bond ensures that those who have paid tuition and have not received the services promised in the student contract can be compensated for unearned tuition or other financial damages.
Who Needs Them?
The Wyoming Department of Education registers all private schools doing business in the state of Wyoming. Purchasing a Wyoming private school performance bond is a mandatory step in the registration process. The Department of Education is the bond’s obligee, the party requiring the bond. The bond must be purchased in the name of the school’s owner, known as the bond’s principal.
The bond must be renewed prior to every expiration date so that there is always an active bond in force.
How Do They Work?
The surety bond agreement is a legally binding contract among three parties: the obligee, the principal, and the bond’s guarantor, known as the surety. In the event of a school closure requiring a refund of unearned tuition, the obligee may file a claim on behalf of all students eligible for a refund. In other instances, injured parties may file their own claims for damages.
Upon receipt of a claim against a Wyoming private school performance bond, the surety will investigate to determine its legitimacy.
How Are Claims Paid?
The terms of the surety bond agreement legally obligate the principal to pay all valid claims. However, the surety has guaranteed their payment by agreeing to extend credit to the principal if necessary for the purpose of paying claims. In the interest of a swift settlement, the surety typically taps into a line of credit established for the principal when the bond was issued uses it to pay the claim initially, on the principal's behalf.
That payment by the surety creates a debt that the principal now must pay back to the surety. Failing to repay the debt can subject the principal to legal action by the surety to recover the funds.
How Much Do They Cost?
The annual premium cost for a Wyoming private school bond is calculated using two factors: the $10,000 bond amount and the premium rate the surety establishes on a case by case basis. The premium rate must be at an appropriate level to offset the risk that the principal won't repay the surety for claims paid on the principal’s behalf. The underwriters rely on the principal’s personal credit score as a measure of that risk. A high credit score is correlated with low risk, and results in a low premium rate. The opposite is also true. A low credit score is a sign of higher risk and results in a higher premium rate.
The average well-qualified principal will pay a premium rate that’s in the range of one to three percent.
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