Cancellation Clause

[Numbers]

What is a cancellation clause and who inforces this?

[Surety Queen]

What is a cancellation clause and who inforces this?

A cancellation clause is specific verbiage in each bond that tells the Surety company how much advance notice the state needs for a bond to be cancelled. For example, if a bond has a 30 day cancellation clause, and we notify Surety to cancel a bond on February 1st, the effective date of that cancellation would be 30 days later - after the Obligee has received the notice. The cancellation clause is taken into account for renewals because most Surety companies want the renewal premium before the cancellation clause - so, if your bond is to renew on March 1st - they want the premium by February 1st. The Surety company enforces this - but the agent notifies the Surety is payment has not been received.
Hope that makes sense!