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Private School: What Is It and How Does It Work

November 29, 2021

surety bond - What Is a Private School Bond (School Bond) - hand holding a pen

What Is a Private School Bond (School Bond)?

The state of California requires a school bond, also known as a private school surety bond before any new educational institution or campus can be constructed. When individuals or entities want to open a new educational institution (such as a kindergarten through twelfth grade (K-12) school, preschool, adult education center, junior college, four-year college, technical trade school, vocational training program, middle school, high school, or charter school), they must submit an application to their local county or city government for approval.

They must also supply a copy of their General Liability Insurance policy as well as proof of commercial general liability insurance in the amount of one million dollars ($1,000,000.00) per occurrence for bodily injury and property damage. A private school bond is also needed by the state of California in addition to this policy.

What Does a Bond for a Private School Guarantee?

A private school bond ensures that the institution will follow all state and local standards while it is open, including safety procedures and fire safety codes established by both the county or city government in which the campus is located and the State Board of Education (SBE).

Before any new educational facility can lawfully function, a private school surety bond must be submitted through a certified California insurance firm. This agreement is between you (the principal), your educational facility, and your California insurance agency.

The bond for your private school must be renewed every year. If you do not renew it, your institution will be closed until you can provide a proper bond. There will be no reimbursements for any remaining months on your contract if this happens.

How does the State of California know if my private school bond application was successful?

The SBE’s Division of State Architect is in charge of ensuring that all public and private schools have completed and submitted their surety bond paperwork. Your school’s name, address, kind of facility (private or public), the city in which it will be located, and an official description of how it will be utilized are all sent to the SBE.

If you’re planning to create a private educational facility in California, be sure your bond is properly filed with your CA insurance agent! If you do not follow these instructions in compliance with California state legislation surrounding this process, you and any future students who choose to attend your institution could face serious consequences!

Before any new educational facility can launch for business, the state of California requires a private school bond. This agreement is between you (the principal), your educational facility, and your California insurance agency.

Make sure you file your bond correctly through your CA insurance agent if you’re opening a new educational facility (such as a K-12 school, preschool, adult education center, junior college, four-year college, technical trade school, vocational training program, middle school, high school, or charter school). If you do not follow these instructions in compliance with California state legislation surrounding this process, you and any future students who choose to attend your institution could face serious consequences!

What Is the Purpose of Private School Bonds?

The state of California mandates that all educational facilities that provide public services follow a set of rules and regulations. The State Board of Education (SBE) will require you to file a surety bond before your new private school (K-12; preschool; adult education center; junior college; four-year college; technical trade school; vocational training program; middle school, high school, or charter school) in California is approved for operation. This document ensures that your campus complies with different fire safety and building codes established by both the county and local governments in which it is located, as well as the SBE.

This bond also acts as a contract between you (the principal), your educational institution, and your California surety bond. The SBE is subsequently given the file number in order to verify that all requirements have been followed and that your institution is free of any ongoing legal difficulties.

What is the cost of a private school bond?

The cost of your California private school bond will vary depending on the nature of your facility and the length of time you want to secure it. The surety premium you pay is based on a percentage of the entire amount that the bond guarantees (the principal).

This rate might range from 1% to 10% of the debt being bonded for. However, there are other elements that can influence how much this paper will cost in the end, such as:

  • Your credit rating
  • Your educational facility’s size
  • How many students do you have on your campus?
  • Whether you have filed for bankruptcy in the previous 12 months or not

If you have experienced bankruptcy within the last 12 months, for example, you are deemed to be highly high risk. In order for your bond to be authorized, you will most likely need to pay a ten percent rate. If you are a known entity (meaning you have no negative past associated with your name) and have acceptable credit, the charge may be decreased to 5%.

To know more about surety bonds, visit Axcess Surety now!

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