Wage and Welfare Bond

Wage and welfare bonds ensure that an employer pays wages and contributes to welfare funds. If these dues are defaulted on a claim may be filed against the employer. They also guarantee union dues compensation.

High risk

In the past bonding companies did not write bonds when there was a chance for a claim to be filed. Unlike insurance companies, no claims are written into a premium. However, there is still hope for people seeking high-risk bonds like wage and welfare bonds, as well as for people with bad credit.

Claims built into premiums and cash collateral create high-risk and bad credit programs. This is good news not only to those with poor credit, but also those who are looking to purchase a wage and welfare bond.

Applying for the bond

Wage and welfare bonds have less to do with the applicant's credit score and more to do with the bond's loss ratio. In the past few years, high-risk applicants have become more prevalent and the procedure for writing bonds for those with poor credit and/or financial statements and high-risk bonds are the same. The higher the risk on either end, the more claims built into the rate and cash collateral needed.

Surety bond companies do not currently write many wage and welfare bonds because they are high-risk financial guarantees. Since the beginning of the 21st century, financial guarantees have been faded out. However, wage and welfare bonds are still being written; finding a surety company to write one for you might just take a little extra work.