ERISA

Why Do I Need a Service Provider Bond?

01.21.2020

A service provider is a business, organization, or individual who delivers legal, consulting, storage, communication, processing, or other types of services to customers.  Service providers are habitually outsourced or third party suppliers like telecommunication service providers or internet service providers. Service providers are categorized by three types: internal service provider, shared service provider, and external service provider.

Did you know that service providers are subjected to ERISA bonding requirements? Under ERISA Section 412, service providers, pension professionals, investment advisors, and third party administrators are subject to service provider bonding regulations. To determine if your company needs this coverage, visit the DOL Field Assistance Bulletin 2008-04 and review Q8 and Q18.

How Much Does a Service Provider Bond Cost?

Service provider bonds are simple to obtain and reasonably priced. Colonial Surety delivers the lowest possible rate for our customers. The service provider bond premium is based on the quantity of plan assets the service provider has. Since Colonial Surety does not have middlemen or insurance agents, your premium rate will not be adjusted for hidden costs and fees.

How Do I Obtain a Service Provider Bond?

Colonial Surety allows you to purchase and quote I-bonds instantly on our online platform. Simply get your quote online, fill out the information required, and type in your payment method. Colonial Surety is an A-rated insurance and bond company by the A.M. Best incorporated since 1930. We are Treasury listed and are licensed and admitted in every U.S. state and territory excluding U.S. Samoa. Contact us today to purchase your service provider bond.