Many states require bail agents to prove that they will be able to pay for forfeited bail bonds. Often times this is required in bond form. Bail insurance is essentially a large bond that shows the court a bail agent will be able to pay smaller bail amounts in full. Both new and experienced bail agents need bail insurance unless they have the monetary means to underwrite themselves and live in a state that allows bail agents to not be backed by an insurance company. Even if you have the monetary means to show the court you can back the bonds you write, it may be wise to have bail insurance. Many bail insurance providers provide additional benefits, such as a nationwide network of agents to work with.
A surety is the actual insurance company backing bail agents. Some sureties have managing general agents or general agents that manage and interact with the bail agents directly.
A general agent is a registered bail agent that oversees an insurance company's bail division. The general agent is responsible for communicating with, managing, and handling all the paperwork for the insurance company. Essentially, the general agent acts as a go-between for the insurance company and the bail agent. The general agent indemnifies the insurance company of liability in the case of forfeited bonds. Surety companies may use one large general agent or may choose to use smaller, regionally located general agents.
When choosing surety representation, it is important to look at two factors: the contract rate and the value-added benefits. Essentially, how much will you be paying, and what will the surety or general agent do for you? Surety companies generally offer a suite of added benefits, such as discounts on agency management software or other corporate necessities, educational opportunities, and 24 hour support. Each surety or general agent will offer different benefits for working with them - be sure to inquire what benefits you will receive by working with a particular company.
Typically, a surety or general agent will charge around 2% per $1,000 for each bond you write. The contract rate will vary, however, depending on the agent. Like car insurance, your rate can increase or decrease based on the number of years you have been in the bail industry, your forfeiture rate, how much supervision you require and more.
A BUF, or a build-up-fund, is essentially a savings account kept by the surety company. The more money you have in your BUF, the lower your contract rate will be. Surety companies will take legal fees, recovery fees and more out of an agent's BUF if necessary. While surety companies hold the BUF in trust, the account belongs to the individual agent. As a general rule of thumb, 1% of each bond a bail agent writes is deposited into their BUF account.