Why is the Signs and Advertising Bond Important?

1. Ensuring Legal Compliance

Advertising structures, particularly outdoor signs and billboards, are subject to numerous local ordinances and regulations. A bond ensures that businesses adhere to these requirements, reducing the risk of legal violations.

2. Protecting Public Safety

Improperly installed or poorly maintained signage can pose safety hazards, such as falling debris or obstructed visibility. The bond ensures that businesses take responsibility for the safe placement and maintenance of their signs.

3. Guaranteeing Financial Accountability

If a business fails to remove non-compliant signs or pay applicable fees, the bond ensures that the municipality or affected parties are compensated for the costs incurred.

How Does a Signs and Advertising Bond Work?

A Signs and Advertising Bond involves three parties:

• Principal: The business or individual required to obtain the bond (e.g., advertising agencies or sign installers).

• Obligee: The government entity or regulatory agency requiring the bond to ensure compliance with local laws.

• Surety: The bond provider that guarantees the principal’s performance.

If the principal violates the terms of the bond—such as failing to remove signs, pay fees, or adhere to safety regulations—the obligee can file a claim against the bond. The surety will pay valid claims up to the bond amount, but the principal is ultimately responsible for reimbursing the surety for any payouts.

Who Needs a Signs and Advertising Bond?

• Advertising Agencies: Businesses that manage outdoor advertising campaigns and billboards.

• Sign Installation Companies: Companies responsible for placing or erecting signage.

• Businesses with Outdoor Advertising: Retail stores, restaurants, or other establishments that place signs or advertisements on public property.

How to Obtain a Signs and Advertising Bond

Getting a Signs and Advertising Bond is straightforward. Here are the steps:

1. Determine the Bond Requirement: Check with your local government or regulatory agency to confirm the required bond amount.

2. Find a Licensed Surety Provider: Work with a licensed surety company that specializes in license and permit bonds.

3. Complete an Application: Provide information about your business, including its financial standing and experience.

4. Underwriting Process: The surety will evaluate your application, including your credit history and financial stability, to determine your bond premium.

5. Pay the Premium: Once approved, pay a percentage of the bond amount as your premium (typically 1%-3%).

6. Submit the Bond: Provide the bond to the obligee to meet licensing or permit requirements.

Examples of Signs and Advertising Bonds

1. Philadelphia, PA – Outdoor Advertising Bond ($5,000)

This bond ensures that outdoor advertisements in Philadelphia comply with local laws and ordinances.

2. Wisconsin – Nonresident Outdoor Advertising Bond ($5,000)

For businesses operating advertising structures in Wisconsin without a physical presence in the state.

3. Houston, TX – Sign Removacl Bond ($25,000)

Required for businesses responsible for removing old or damaged signs in Houston.

4. Kansas City – Sign Hanger Bond

A specific bond for sign installation companies operating in Kansas City to ensure adherence to local regulations.