Learn everything you need to know about Indiana school bus contractor bonds, and get bonded today with Surety Bond Professionals.
What Are They?
School bus contractor bonds serve the important purpose of ensuring that school buses are operated safely, in accordance with applicable laws and regulations. They also guarantee compliance with every aspect of the contract awarded to them for transporting students from their homes to school and back.
These bonds protect local school districts, students, and families from financial loss due to the noncompliant actions of the bonded individual or company. Failure to maintain a valid bond at all times can result in termination of the transportation contract.
Who Needs Them?
Throughout the state of Indiana, local school boards contract with companies or directly with drivers to provide student transportation within their school districts. Any person or company that provides two or more school buses for student transportation is considered to be a fleet contractor. State law requires school bus drivers and fleet contractors to purchase a surety bond to ensure faithful performance of the contract.
How Do They Work?
Although there is a statewide law requiring the purchase of a school bus contractor bond, the required amount of the bond is established locally and varies from one school district to the next. The local authority awarding contracts for school bus transportation (known as the “obligee” in the surety bond agreement) sets the required bond amount, also known as the bond’s penal amount.
There are two other parties to the surety bond agreement: the driver or fleet contractor purchasing the bond (the “principal”) and the company underwriting and issuing the bond (the “surety”). All three parties have specific rights and responsibilities under the surety bond agreement, which is a legally binding contract.
What Happens If a Claim is Filed?
Any violation of the surety bond agreement by the principal can result in a claim being filed against the school bus contractor bond. If the surety determines that a claim is legitimate, the principal is obligated to pay damages to the claimant.
Often, the surety will go ahead and pay a claim in advance on behalf of the principal. The principal must then repay the surety. An indemnification clause in the surety bond contract relieves the surety of any responsibility for paying claims. That responsibility belongs solely to the principal.
Be aware that failing to require school bus drivers to attend a mandatory annual safety meeting can result in contract termination and forfeiture of the bond.
What Do They Cost?
The annual premium for any surety bond is a small percentage of the required bond amount. While the obligee establishes that bond amount, the surety sets the premium rate for each bond applicant on a case-by-case basis.
The biggest factor the considered when setting the premium rate is the applicant’s personal credit score. The better your credit score, the lower your premium rate.
Get Bonded Today
At Surety Bond Professionals, we’ll get you the best possible rate on the school bus contractor bond you need. Contact us to request a quote today!