Reminder to contact Avalon for bonds written
outside your authority
Avoid bond
aggregation and increased exposure |
Avalon Risk Management, Inc. would like to
remind its valued customs broker clients of the
importance of contacting your local Avalon
office when writing U.S. Customs bonds beyond
your authority.
Customs brokers may write general merchandise
bonds at their own discretion up to $350,000 for
single entry bonds and $100,000 for continuous
bonds. Bonds outside the scope of a customs
broker’s authority require prior approval and
the submission of a signed bond application,
financial statements, general indemnity
agreements and collateral as necessary.
Contacting Avalon is important especially in
regard to the ensuing bond aggregation issues
and increased risk, which affects the operations
of importers, customs brokers and sureties. Bond
aggregation consists of the total face value of
all existing bonds for a single principal (or
group of affiliated companies). Aggregation
increases an importer’s exposure to liquidated
damages, in addition to increasing a customs
brokerage company’s exposure to Errors &
Omissions (E&O) claims as brokers may ultimately
be held responsible for excess losses.
Importers often look to their customs broker to
provide answers to underwriting inquiries, and
offering a beneficial underwriting solution will
help a customs broker’s account retention.
Avalon suggests customs brokers consistently
offer a continuous bond, especially in place of
high-limit single entry bonds. Working together,
Avalon, its customs broker clients and importers
must understand the risks of bond aggregation.
Avalon is a market leader with a 35 percent
share of the Customs bond market. We place a
high importance not only on educating customers
on the importance of proper insurance and surety
products, but also on increasing business
opportunities. We are proud to offer the “Bond
Revenue Enhancement Program” as a marketing
service to our customs broker clients. The Bond
Revenue Enhancement Program allows customs
brokers to target existing importer clients
where bonds are not currently controlled by the
broker. Avalon understands the revenue source
that Customs bonds provide. Allow us to show you
how our Bond Revenue Enhancement Program can
increase your revenue and client retention. |
For more information, please contact your
local Avalon office or Andriana Davis, Product
Manager at (847) 700-8087 or at
adavis@avalonrisk.com. A list of our North
American offices can be found at
www.avalonrisk.com. |
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