Texas Athlete Agent 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 your Texas athlete agent bond needs.
What Are They?
Texas requires athlete agents to be properly registered with the Texas Secretary of State. Purchasing a Texas athlete agent surety bond is a prerequisite for every new or renewal registration. The bond provides financial protection for the athletes represented by an agent—protection that continues for two years after that relationship ends.
Specifically, a Texas athlete agent bond is the agent’s guarantee to operate in compliance with Chapter 201 of the Texas Occupations Code, which outlines the obligations and responsibilities of athlete agents. Violating that code, whether by intentional fraud, deceit, negligence, omission, or another unlawful act can result in a claim being filed against the bond by any athlete financially harmed by the violation.
Athlete agent bonds do more than just indemnify the Secretary of State against liability for having registered an athlete agent whose unlawful or unethical conduct causes an athlete to suffer a financial loss. They also ensure that funds will be available to compensate athletes for such losses.
Who Needs Them?
There are two different classes of Texas athlete agents, and the required bond amount is different for each:
- For agents who provide both representation and financial services (such as managing an athlete’s earnings), the required bond amount is $100,000.
- For agents who do not provide such financial services, the required bond amount is $50,000.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The surety bond agreement for a Texas athlete agent bond is a legally binding contract between these three parties:
- The “obligee” requiring the bond is the Texas Secretary of State.
- The “principal” required to purchase the bond is the Texas athlete agent seeking a new or renewal registration.
- The “surety” is the bond company underwriting and approving the bond.
There are several grounds for a valid claim against a Texas athlete agent bond, such as the following:
- Violating the relevant Texas statutes in a way that harms the athlete financially.
- Failing to pay administrative penalties.
- Offering or providing something of value to a student-athlete or family member or an institution of higher education.
The surety will investigate each claim to determine its validity and may attempt to negotiate an amicable settlement. When the surety establishes that a claim needs to be paid, that payment is made by the surety on behalf of the principal. In paying a claim in this manner, the surety is extending credit to the principal, which creates a debt that the principal must repay.
It’s an arrangement that benefits the athlete, who is paid promptly, and the principal, who is able to repay the surety in manageable installments, rather than having to come up with the entire claim amount at once.
What Do They Cost?
Because the surety is agreeing to extend credit to the principal for the purpose of paying claims, their main concern is the principal’s creditworthiness. A principal with an excellent personal credit score may pay as little as 1-2% of the required bond amount as the annual premium for a Texas athlete agent bond.
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Our surety bond professionals will get you the Texas athlete agent bond you need at a competitive rate.