Patient Trust Bond Overview
Patient trust bonds are a type of surety bonds, which are mandatory for nursing homes in the majority of states. Their purpose varies from state to state but in general they are put in place to provide protection to patient trust funds and how they are managed.
Like other surety bonds, patient trust funds can be understood as a three-sided contractual agreement. There is a principal (the nursing home), an obligee (a state agency) and a surety (a bonding company).
This agreement is backed by the surety, who agrees to extend a line of credit to the nursing home. If the principal violates its terms, they can face a claim. A validated claim would mean the nursing home has to reimburse the claimant up to the total value of the bond.
You can begin your application now, or continue reading for more information on patient trust bonds, including some useful cost-saving tips.
Patient Trust Bond Cost
Each state requires a different total value of the bond. The total value refers to the maximum protection a bond offers to potential claimants. But nursing homes are not required to pay this amount.
Instead, surety bonds are paid for in premiums which comprise only a small percentage of the total bond value. Bonding companies assess an applicant’s financial strength and credit report to determine their premium. Credit score is without a doubt the most important factor. Applicants with good credit may end up paying a premium as low as 1%.
Our surety bond cost guide has a bond cost calculator, which will give you a rough estimate of your premium. It also contains some really useful tips on how you can lower your premium as much as possible. For an exact quote you can submit our online application.
Getting a Patient Trust Bond with Bad Credit
Patient trust bonds are considered low-risk, because there haven’t been many claims triggered against them. This means that your bad credit score will not prevent you from getting bonded.
Naturally, since the perceived risk for sureties is a bit higher, premiums will also be a bit higher than the standard market rates, but will rarely exceed 10%. Consult our Bad Credit Program for more information if you are experiencing bonding difficulties due to bad credit.
How to Avoid Claims Against Your Surety Bond
Bond principals are always advised to avoid bond claims as much as they can. A validated claim can not only be costly, but waste a great deal of time and other resources.
If you get into a dispute, your best course of action is to settle it out of court. You can get the bonding company involved as well. If you have sufficient proof that you did not violate the bond agreement, the surety can provide legal assistance, so you can avoid paying costly penalties.
Every state has different requirements as to the purpose of the patient trust bond, so it’s important to get acquainted with the bond language well. Apart from the proper management of trust funds, the bond can have more specific requirements, for example that patient funds are held separately and in a trust, or that reports are made to the depositors upon request.
Apply for Your Patient Trust Bond Today!
Applying for your surety bond is not a complicated or time-consuming process, thanks to our 1-page online application. After submitting it, you will get a free bond quote based on the information you provided.
One of our agents will be in touch with you shortly to take you through the rest of the process. If you still have questions, don’t hesitate to call us at 866.450.3412.