Many of Illinois' 1.2 million small businesses require commercial auto insurance for work vehicles. Personal auto policies typically do not cover vehicles used for business purposes because they are more liable than personal vehicles.
In 2018, the Illinois Department of Transportation (IDOT) reported over 319,000 motor vehicle crashes, with over 21% resulting in non-fatal injuries. Such incidents frequently result in costly lawsuits and financial hardships that are difficult to overcome in the absence of adequate insurance.
Over 700,000 small business owners in the United States rely on us to protect their commercial vehicles. Each receives a policy tailored to their specific needs, whether they own a single delivery van in Springfield or several catering trucks in Chicago.
Read on to know more about what the right bonds insurance policy requires, covers, and offers your business for long-term growth.
The Illinois Department of Insurance requires insurance producer bonds for $2,500 or 5% of total premiums brokered in the previous year, whichever is greater. The required bond amount is limited to $50,000.
Illinois insurance producer bonds ensure that principals (insurance producers) follow Illinois Insurance Code Section 500-30. This bond also requires producers to pay all dues to anyone or any company entitled to money from insurance transactions.
Surety Bond Types in Illinois
When applying for a bond in Illinois, you may need one of the three types of bonds listed below:
Your surety bond has a specific amount, such as $20,000 in the case of an auto dealer bond. If a claim is made against the bond, this is the total coverage that the surety would provide to the bond's obligees (the state of Illinois and your customers). The amount of your surety bond differs from your bond's cost.
The most important factor that sureties consider when determining an applicant's premium rate is their credit score. Applicants with a high credit score are considered more secure and thus receive lower interest rates. Other factors that sureties consider include:
Applicants with excellent credit are offered rates on their Illinois surety bond ranging from 1% to 4% of the total bond amount. These rates are regarded as market rates.
Here are some questions people who want bonds insurance constantly ask:
A bond claim or a lien on contract monies are the two forms of defense accessible to parties on unpaid public projects in Illinois. Subcontractors and suppliers of labor and materials to the general contractor or a first-tier sub are protected parties for both claims. More distant parties might also be covered. However, this is not clear.
Most license bonds are only good for a year before needing to be renewed. If they are not renewed, the bond expires, and the State or federal agency that issued your professional license will often revoke it.
The majority of bonds can be redeemed after one year, but if you do so before five years, you will forfeit three months' worth of interest. Savings bonds worth hundreds of dollars will still be returned to you at their current value.
Key Learnings. The time until a bond matures and how long its owner will continue to receive interest payments. The bond's face value, or par, is returned to the owner when it matures. If the bond has a put or call option, the term to maturity may change.
If the project is a State project, a bond claim must be submitted to the officer, board, bureau, or department of the contracting entity; for all other public works projects, it must be submitted to the Clerk or Secretary of the political subdivision. The general contractor must also receive notice of the claim.
Knowing the different types of insurance and their coverages is important in getting the right policy for you if you want to cover your bases and get your business properly insured. Here are some of the most common types of insurance, how they work, and what they cover:
Maintain competitiveness of small and large enterprises with reliable and comprehensive Illinois bonds insurance policies. Finding the right insurance policy and getting professional services for bonds insurance or surety bonds policies with the right insurance company can make a huge difference.
To learn more about bonds insurance policies for your business in Illinois, read through our blogs at Assured Standard and grasp what smart long-term business solutions could look like for you.