Union wage bonds exist as a means of guaranteeing union dues in the event that union members are unable to pay. Theoretically, each union member is required to pay their own dues. If they are unable to pay their dues for a specified amount of time, the lost dues can be collected by the union via filing a claim on the already established wage and welfare bond. Because each local union functions financially as an autonomous entity, each branch must apply separately for union wage and welfare bonds in Arizona.
Unfortunately, it can be quite challenging to find an underwriter for financial bonds of this type. This is largely due to past market troubles. Many bonding companies lost their licenses or were put out of business entirely due in part to the high loss ratios on financial bond writing. This has created in contemporary times a quite conservative market. Most companies that do handle financial bonds require full collateral, and many refuse to handle them entirely. Expect higher rates compared to other types of bonds and potential difficulty finding an underwriter.
If you’re in a position where Union Wage And Welfare Bonds in Arizona are absolutely necessary to maintaining proper procedures, as may be the case, be sure to find a company that is actually equipped to underwrite your bond. There’s no sense in wasting time with agents that are not specialized in the writing of financial bonds, as you will likely be turned down and even if accepted will end up paying exorbitantly high premiums.
Even if you’re taking your business to a qualified bonding company, don’t expect the premium on a wage and welfare bond to be cheap. The average bonding company offering property or casualty bonds will not be able to place these types of bonds, but the right surety agent can. Despite the difficulty in finding underwriters, there are reputable companies offering these financial bonds. The only way to estimate accurately the premium you will have to pay is to get a quote from a reputable company. Browse our website for more information about what is required and to get a quote today.
Louis Shea
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