The more airline reporting professionals know about surety bond insurance, the better prepared they will be to buy or renew their airline reporting bonds. To help with this, our surety specialists have developed a simple guide to airline reporting bonds.
What is an Airline Bond?
Required by the Airline Reporting Commission (ARC), Airline Reporting Bonds, better known as airline or ARC bonds, protect customers, airline carriers, and the ARC by:
Ensuring any payment collected by a travel agent from customers will be sent to the proper airline company.
Guaranteeing travel agents will forward payments to ARC made through the corporation’s systems
Safeguarding carriers and the Airlines Reporting Corporation from fraudulent practices by travel agents.
If a travel agent fails to forward any payments to the ARC or a carrier, these parties can place a claim against the bond.
How much does an airline bond cost?
Bond amounts are determined by ARC, but must be at least $20,000. Since the amount of the bond varies, the premium an applicant will pay also varies. Premiums are based on the applicant’s financial standing and start as little as 1% of the total amount of the bond.
Select your state below for more information about airline reporting bonds in your area, or give us a call at 1 (800) 308-4358.
Learn More about ARC Bonds
ARC bonds are a type of financial guarantee bond and function as a contact between three parties:
The principal is the travel agency obtaining the bond
The obligee is the Airlines Reporting Corporation requiring the surety bond to reinforce and ensure the travel agent’s compliance to laws and expectations.
The surety is the insurance underwriter issuing the bond, thus backing the principal.
Who Needs an ARC Bond?
Travel agents, agencies and any businesses offering airline transport to their customers need to post an ARC bond.
ARC bonds are different from travel agency bonds. Travel agency bonds guarantee your compliance in all your bookings, regardless of whether they involve airlines. Also, while ARC bonds are required by the Airlines Reporting Corporation, travel agency bonds are often required by your state. Depending on your location, you might need to obtain both bonds.
What is the fine print?
There a few things you should know about airline bonds before purchasing one:
Airline reporting bonds are in effect for one year and must be renewed annually until claimed against or canceled. The surety has the right to cancel the bond at any time by giving 30-days’ written notice to the principal and obligee.
ARC bond must be continuous and valid for as long as an agent has ARC accreditation.
A number of surety agencies require applicants to post collateral due to the risk of this type of bond. At SuretyBonds.com, we are willing to write such bonds at low rates without requiring posted collateral to the applicants that qualify and are in decent financial standing.