Overview of Pharmacy Bond Requirements
This bond is a commercial bond required of prescription and non-prescription drug wholesalers and distributors of medical equipment in a number of states. In most states requiring this type of bond, its purpose is to guarantee that such wholesalers will make any due payments, such as fees and penalties, to the state authority governing the industry in a timely manner.
If a licensed and bonded wholesaler fails to comply with the conditions specified in the bond agreement, a claim can be made against their bond to compensate for any losses or harms that result from such a violation. When a claim is made, the surety which backs the bond extends compensation up to the full amount of the bond, also known as the penal sum.
Currently such bonds are required, among others, in: Arizona, California, Florida, Iowa, Indiana, Nebraska, Nevada, North Dakota, Oregon, Maryland, Mississippi, South Dakota, Texas, Wisconsin, Wyoming.
See our ‘What is a surety bond’ guide to find out more about how surety bonds work, and why you need one!
See below for an explanation of the bond cost, bond claims, and the process of getting bonded.
Do you have any questions regarding the bonding process or requirements for these bonds? Call us at 866.450.3412 to speak to one of our surety experts!
How Much Your Bond Will Cost
The cost of your bond, also known as your bond rate, is a percentage of full bond amount required by your state Board of Pharmacy. The full amount of pharmacy bonds varies from state to state but most states requiring such a bond set an amount of $100,000 for the bond.
When you apply for your bond with a surety, the surety determines the percentage you need to pay based on your credit score, as well as your financial statements, liquidity, assets, and other financial indicators. Credit score is the most important among these factors, and the higher an applicant’s credit, the lower the rate required by the surety.
Typically, applicants with a credit of 700 FICO or above are offered the lowest rates which, for this bond, can be between 0.75% and 1.5% of the total sum. See the table below for an overview of how much your bond may cost, depending on your credit score.
|Surety Bond Cost Based on Credit Score|
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
If you want to know exactly how much your bond will cost, submit a bond application form and we will provide you with a free and precise quote on your bond!
Getting Bonded With Bad Credit
Even if your credit score is in the lower digits, you can get bonded just as easily as with a high credit score, thanks to our Bad Credit Program.
Our program makes bonds available to applicants with low or nonexistent credit scores from the same companies that issue all the bonds we provide. Rates under this program are higher due to the higher perceived risk by sureties. Yet, by improving your credit score, you can get increasingly better rates over time.
Get a free quote on your bond, and find out more about this program by visiting the program page.
Claims Against Your Bond
Most pharmacy bonds are conditioned upon distributors’ compliance with local codes and regulations governing their industry, faithful and honest execution of their responsibilities and, in particular, the payment of any fees, costs, and penalties owed to their Stare Board of Pharmacy or the respective licensing authority.
If a distributor fails to comply with these conditions and violates them in any way so as to cause losses or damages to the public or the state authority, a claim can be filed against their bond for compensation.
Compensation paid out by a surety for a claim against a bond can be as high as the full bond amount. If a surety extends compensation to claimants, the bonded party, in this case a wholesale distributor, must repay the surety in full.
Get Your Bond Now!
To request a free quote or start your application process, complete and submit our bond form. We will then get in touch with you, to provide you with your quote, along with further details on completing your application.
Once your bond is issued within two working days, we will forward it to you via standard mail, as well as provide you with a digital copy via email.
Get in touch with us at 866.450.3412 to find out more about the bonding requirements for wholesale distributors in your state.