Agricultural Bonds: Easy and Efficient Way to Avoid Unnecessary Risk
An agriculture dealer, who is engaged in buying, reselling, managing, soliciting or negotiating agricultural products, needs a license to operate his business. He is also required to hold a surety bond. An agricultural bond protects both the producers and consumers of agricultural products. It protects producers from unnecessary risk and loss in the sale of their products and ensures an adequate supply of agricultural products to the consumers within the state.
If the dealer fails to complete his tasks per the terms of the surety contract, the customers or the harmed parties can claim for the financial loss up to the full penal sum of the bond. The agricultural product dealer bond cost is generally based on 2 important factors:
a) Type of agricultural products
b) Volume of annual business
Before bonding, the agricultural dealer is required to verify his bond amount with the state. Since the agricultural bond is subject to underwriting, the price the dealer will pay for the bond depends not only on the dealer’s requisite bond amount, but also on an analysis of his personal and business financial capacity.
These days, there are a number of surety bond agencies providing competitive rate quotes for agricultural bonds. Make sure to check the performance and reputation of the agency before purchasing the bond.