Learn about express script bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Express Script Bonds?
Express Scripts is the largest pharmacy benefit manager (or PBM)—a class of companies that provide home delivery of prescription medications and other items through a network of agreements with pharmacies, insurance companies, and patients. The purpose of PBMs it to simplify and reduce the cost of the process through which consumers obtain the medications they need.
Express Scripts establishes contracts with pharmacies from coast to coast, and has established a performance bond requirement to guarantee that those pharmacies abide by the terms of their contract. The bond protects Express Scripts against contract violations by the pharmacies that become part of the company’s home delivery network.
Who Needs Them?
Any pharmacy that wants to become affiliated with Express Scripts must sign a contract, purchase an Express Scripts surety bond, and maintain it for at least the first two years of the of the contract—or longer in some cases.
How Do They Work?
In the case of an Express Scripts bond, Express Scripts is the obligee. The pharmacy contracting with Express Scripts and purchasing the bond is the principal, and the surety company underwriting and issuing the Express Scripts bond is the surety.
Express Scripts has the right to file a claim against the bond of any pharmacy that has violated the terms and conditions of its contract. If the surety determines that the claim is valid, it will make payment to Express Scripts. The principal is then legally obligated to reimburse the surety for the amount of the claim.
What Do They Cost?
The bond amount required by Express Scripts is $500,000. Because of the large bond amount, the application and underwriting process is more rigorous than it is for many other types of bonds. Only surety companies that meet certain criteria set by Express Scripts are allowed to underwrite Express Scripts bonds. Specifically, they must have an A.M. Best rating of A-VII or higher.
Each applicant will be assigned a premium rate based on the surety’s evaluation of the applicant’s credit score, personal and business financial statements, and owners’ resumes. This information allows the surety to estimate the likelihood of a claim against the bond and the applicant’s financial ability to reimburse the surety for claims payments made to the obligee.
Use our convenient online system to apply for an Express Script bond today.