Florida Agricultural Dealer 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 Florida agricultural dealer bond needs.
What Are They?
Agricultural dealers purchase agricultural products from agricultural suppliers and resell them for a profit. A Florida agricultural dealer bond is a type of license and permit surety bond that helps ensure the integrity and smooth operation of Florida’s agricultural markets. The bond serves as a dealer’s guarantee to operate in complete compliance with Florida laws, rules, and regulations governing the industry.
Florida agricultural dealer bonds protect the Florida Department of Agriculture, which licenses agricultural dealers, against being found liable for any damages caused by the unlawful or unethical acts of a licensed dealer. Agricultural dealer bonds also ensure that there will be funds available to compensate the injured party in such cases.
Who Needs Them?
Anyone renewing or applying for a new agricultural dealer license in Florida must first purchase an agricultural dealer bond. The required bond amount (or penal sum) is based on the dollar value of the dealer’s business in Florida during the previous year’s month with the highest volume of agricultural products. The Florida Department of Agriculture (referred to in the surety bond agreement as the “obligee”) will determine the required bond amount on a case-by-case basis.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
When an agricultural dealer purchases a Florida agricultural dealer bond, the surety company (referred to simply as the “surety”) establishes a credit line in the required bond amount. If a valid claim is filed against the bond by a party who has suffered financial harm as a result of the dealer’s violation of the terms of the surety bond agreement, the dealer (referred to as the “principal”) is legally obligated to pay it. The most common violation is nonpayment of an agricultural supplier for products purchased for resale.
That doesn’t mean that the principal writes out a check and hands it over to the claimant. Instead, the surety investigates the claim, and if it is found to be valid, pays it by tapping the credit line set up for the principal when the bond was issued. The principal is legally obligated to repay the surety—often in installments—over a certain period of time.
What Do They Cost?
Surety companies charge an annual premium for a Florida agricultural bond—a premium that is a small percentage of the required bond amount established by the obligee. The surety determines what the premium rate will be based largely on the principal’s personal credit score and financial capacity. The more confident the surety is that the principal will repay any debt created by payment of a claim, the lower the premium rate will be.
With a good credit score, the premium rate should be between 1% and 3%. Agricultural dealers with lesser credit should still be able to get bonded but may pay a higher premium rate.
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Our surety bond professionals will get you the Florida agricultural dealer bond you need at a competitive rate.