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What Is a Private School Surety Bond?

November 29, 2021

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What Is a School Bond (Private School Bond)?

A school bond, also known as a private school surety bond, is required by the state of California before any new educational facility or campus can be established. When individuals or entities want to open up 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 file an application for approval with their local county or city government to ensure the proposed location complies with fire safety and building codes.

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

What Does a Private School Bond Guarantee?

A private school bond guarantees that the institution will comply with all state regulations and local rules while it is in operation, including safety procedures and fire safety codes set forth by both the county or city government where the campus resides as well as the State Board of Education (SBE). 

A private school surety bond must be submitted through a licensed California insurance agency before any new educational facility can operate legally. This document serves as an agreement between you (the principal), your educational facility, and your CA insurance agent.

Your private school bond must be renewed annually. Failure to renew it will result in the closure of your institution until you can provide a valid bond. When this happens, there are no refunds for any partial months left on your contract.

How Does the State of California Verify That My Private School Bond Was Successfully Filed?

The Division of State Architect at the SBE is responsible for verifying that all public and private schools have submitted their surety bond paperwork. The SBE also receives additional information about your school, including its name, address, type of facility (private or public), the city where it will be located, and an official description of how it is being used.

If you are opening a private educational facility in California, make sure you file your bond correctly through your CA insurance agent! If you do not adhere to these guidelines in accordance with CA state laws regarding this process, there could be severe penalties against both yourself and any future students who decide to attend your institution!

A private school bond is required by the state of California before any new educational facility can open for business. This document serves as an agreement between you (the principal), your educational facility, and your CA insurance agent.

If you are 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), make sure you file your bond correctly through your CA insurance agent! If you do not adhere to these guidelines in accordance with CA state laws regarding this process, there could be severe penalties against both yourself and any future students who decide to attend your institution!

Why Are Private School Bonds Required?

The state of California requires that any and all educational facilities that provide services to the public must abide by certain rules and regulations. If you are opening a 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 the state of California, the State Board of Education (SBE) will require you to file a surety bond before it is approved for operation. This document guarantees your compliance with various fire safety and building codes set forth by both county and local government where your campus resides as well as the SBE.

This bond also serves as an agreement between you (the principal), your educational facility, and your CA surety bond. The file number is then provided to the SBE in order for it to be verified that all regulations have been met and that there are no pending legal issues with regard to your institution.

How much does a private school bond cost?

The cost of your private school bond in California will vary depending on the nature of your facility and how long you would like to secure it. The surety premium you pay is calculated based on a percentage of the total amount that is guaranteed by the bond (the principal).

This rate can range anywhere between 1% – 10% of the principal being bonded for. However, there are additional factors that can have an effect on how much it will ultimately cost for this document to be written, such as:

  • Your credit score
  • The size of your educational facility
  • How many students are enrolled at your campus
  • If you have ever filed bankruptcy within the last 12 months or not 

For example, if you have ever had a bankruptcy within the last 12 months, this is considered to be extremely high risk. A 10% rate will most likely need to be paid in order for your bond to be approved. However, if you are a known entity (meaning that there is no negative history attached to your name) and have good credit, it could lead to the rate being reduced down to 5%.

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

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