Wage and welfare bonds, also known as union bonds or wage bonds, are a type of surety or financial guarantee bond that a union requires an employer of union members to post, to ensure that negotiated union benefits are properly paid along with union dues. In the event that a union affiliated shop does not pay dues or benefits, as required by their union contract, the surety will cover the outstanding debt.
Typically, wage and welfare bonds do not have a deductible, meaning that unions are completely covered by the insurance company for all applicable losses. Labor unions require wage and welfare bonds at the local level, guaranteeing that the local union, not the national organization, receives their dues. Each local union has its own formula to determine the amount of the required surety coverage.
Each union has its own specific bond form and a separate bond is required for each of them. Financial guarantee bonds are not easily written with many of today’s surety companies. But, wage and welfare bonds are one of the few financial guarantee bonds that some sureties will consider. South Coast Surety has the underwriting authority to place the bond regardless of your company credit or financial strength. We have the ability to quickly approve applications at very reasonable rates.
