- ARC Bonds are designed to ensure that money collected by travel agencies for tickets sold will be sent to designated airlines
- Considered a Financial Guarantee Bond
- Obligee is Airline Reporting Commission
- Currently there are no bad credit programs for ARC bonds
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ARC Bond Definition
An ARC bond, also known as an Airlines Reporting Corporation Bond, is a commercial surety bond used by travel agents. ARC bonds are required by the Airlines Reporting Corporation (ARC) for travel agents before they are granted travel related information through the ARC or are allowed to distribute tickets.
The bond’s purpose is to guarantee that agents will forward payments they receive from customers to airline carriers they work with. The bond also guarantees that travel agents will forward payments to ARC made through the corporation’s systems. The bond serves to protect carriers and the Airlines Reporting Corporation from fraudulent practices by travel agents. If payments are not forwarded by agents the ARC or a carrier can place a claim against the bond.
ARC bonds are similar to travel agent bonds but only cover airline bookings, whereas travel agent bonds cover other types of bookings as well. Also note that an ARC bond needs to be continuous and valid for as long as an agent has ARC accreditation.
Obtaining an ARC bond without posting collateral is usually complicated as this surety bond is considered a risky one. Although claim rates on ARC bonds tend to be higher than on most other bond types, there are markets willing to write such bonds without collateral to the applicants that qualify.
To qualify, applicants must be an existing company with good credit score. Because of the risk, ARC bond rates are higher than most commercial bonds, though good rates are available in the standard market.
Currently there are no specialized markets for ARC Bonds. Despite this, Bryant Surety Bonds works with all accredited sureties that can place your bond at the lowest possible rate.
ARC Bond Cost
The cost of your ARC bond depends on the amount of the bond you have to post. ARC bond amounts are usually based on the average monthly net cash remittances of travel agents or agencies for a period of 12 months. The minimum bonding amount is $10,000 and the maximum $70,000.
Agents or agencies who apply to ARC for the first time, have to post a $20,000 ARC bond. After applying and having been on the ARC Agency List for two years, agents may have their bonding amount reduced to $10,000.
The cost of your ARC bond is based on the full coverage amount of your surety bond. Depending on the amount, as well as on important financial factors such as your personal credit score and your company’s business statements, you will be offered a rate or premium on your bond.
Rates for ARC bonds are typically higher than on other license and permit bonds due to the greater risk involved in the transfer of funds from one entity to another. Yet, you are likely to receive a rate on your bond ranging between 1%-5% of the total bond amount.
Working with a professional and reliable surety bond company also influences the rates you will be offered on your surety bonds. Bryant Surety Bonds has been in the surety bond industry since 2007 and has built an extensive network of partner companies.
We work only and exclusively with A-rated and T-listed surety bond companies which provide us with bonds at competitive rates in all 50 states! By getting your ARC bond with us, you are sure to receive a low premium rate on these otherwise risky bonds.
Visit our surety bond cost page if you would like to better understand how surety bond cost is determined.
How to Get Your ARC Bond
Ready to get your ARC bond? Apply online now to get a free quote on your bond. Once we’ve clarified all the details, we will proceed with underwriting your bond.
If you wonder whether you will be able to get bonded or are not sure whether an ARC bond is what you need, simply call us at (866)-450-3412. Our surety bond experts are among the best in the industry and will be able to provide you with all the information you need!