FOR ALL YOUR SURETY BOND NEEDS.
These surety bonds are general for all states.
Learn more about union bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
Union bonds, also called wage and welfare bonds or wage and benefits bonds, protect employees who belong to a labor union. They are a type of financial guarantee surety bond. Companies typically sign collective agreements with unions as a condition for hiring union members, and the exact terms of a particular union bond are established by that union. Consequently, there may be small differences from one bond to the next.
Typically, these bonds guarantee that the employer makes the necessary contribution for union dues, wages and benefits to a union’s welfare fund. Sometimes, the bond will guarantee only the payment of wages or only the payment of regular or fringe benefits.
These bonds are purchased by companies that employ people who belong to a labor union. The requirement for a union bond is stated in the collective agreement that spells out the conditions under which the employer can hire union members.
The union is the obligee requiring the bond, the company hiring union members is the principal, and the company that underwrites and issues the bond is the surety. If the principal does not pay union members according to the terms of the collective bargaining agreement, the union can file claims against the bond on behalf of the employees affected. The surety will investigate the validity of each claim before making payment. Ultimately, the employer must repay the surety for any claims paid against the bond.
Every union sets the conditions and amount of the bond it requires an employer to purchase. Consequently, there are some minor differences between these bonds, and these can affect the cost of a bond. The ultimate cost of your specific bond will depend on such factors as the terms of the bond, which union you’re dealing with, and the amount of the bond.
Because of the amount of risk involved in issuing a financial guarantee bond, surety companies sometimes require an applicant to post collateral in the full amount of the bond. Full collateral may not be required if you have a high credit score. Additionally, if you have been a customer of a surety company for some time and have a good relationship with it, the surety can write a letter to let the obligee know that you are a customer in good standing, which may convince the obligee not to require you to post full collateral.
If you meet all of those conditions, your annual premium rate for this type of bond should be in the range of 1% to 4%.
Use our convenient online system to apply for a union bond today.
