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Q: What is a Surety Bond? A: Surety Bonds are financial instruments that guarantee the performance agreed to by the Independent Contractor in the delivery agreement. In its simplest form, an Insurance Company issues credit to any person who qualifies as an Independent Contractor. Instead of requiring a Contractor to fully collateralize their immediate financial responsibilities, the Insurance Company provides Surety Bonds to cover financial liability due the Newspaper.

Q: Why do I have to have it? A: As an "independent business person" you have to collateralize your financial obligations to the Newspaper or distribution company. Whereas many Newspapers now have a significant percentage of "office pay" subscribers or E-Z Pay subscribers, much your financial obligations have been minimized but they have not disappeared entirely. Also, Surety Bonds are used to ensure that you honor your obligation to provide the Newspaper or distribution company with a 30-day notice of your intention to terminate your agreement.

Q: If I am assaulted On-Route, does the bond cover me? A: No. The bond is used only to ensure that financial and performance obligations are fulfilled. You can enroll in the insurance program made available to provide coverage for any physical injuries resulting from accidents.

Q: How is the bond liability amount determined? A: It used to be a rule of thumb to calculate the Newspaper charges and take that amount times two and one-half to arrive at an amount. Now with so much advance payment by home delivery subscribers, the amount usually, (but not always) is determined by estimating the cost of completing delivery of your Route(s) if you were to breach your agreement.

Q: Will my credit history be checked? A: Some Newspaper companies and distribution companies will check your credit history.

Q: If I fail to pay my bill or breach my agreement, what happens? A: You will be contacted by the Newspaper. If you refuse to acknowledge their requests for payment, they file a loss against you with us. We then reimburse the company and turn your loss documents over to professional recovery agencies that exhaust all remedies for reimbursement of the loss. Your Social Security number and all collaborating data are submitted to every credit bureau in your region and also to the national big three. It creates a nightmare for you to finance appliances, TV's, automobiles and lower interest mortgage rates.

Q: What if I don't want to be bonded? A: You can easily satisfy the bond requirement with a check for the bond liability amount to fully indemnify the newspaper if you wish and have the financial wherewithal to do that. Otherwise, you would pay a non-refundable bond premium to satisfy the financial requirements set by the Newspaper or distribution company.

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Christopher Herr
Detroit Newspaper Agency
Detroit, MI