Huntsville Retail Vendor Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain Huntsville Retail Vendor Bonds
At a Glance:
- Average Cost: Either $100 or 0.5% of the bond amount, whichever is greater
- Bond Amount: Determined on a case by case basis (more on this later)
- Who Needs it: All sponsors of events that include retail vendors operating in Huntsville, Alabama
- Purpose: To ensure the city will receive compensation for any damages should the sponsor fail to pay all required taxes and fees
- Who Regulates Event Sponsors in Huntsville: The City of Huntsville
Huntsville Municipal Code Sec. 15-36. requires all event sponsors operating in the city to obtain a business license. The Huntsville city council enacted the licensing laws and regulations to ensure that event sponsors engage in ethical business practices. To provide financial security for the enforcement of the licensing law, sponsors of events that include retail vendors must purchase and maintain a surety bond to be eligible for licensure.
What is the Purpose of the Huntsville Retail Vendor Bond?
Huntsville requires all sponsors of events that include retail vendors to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the city will receive compensation for financial harm if the event sponsor fails to comply with the regulations set forth in Huntsville municipal code 15-85. Specifically, the bond protects the city if the event sponsor fails to pay all required taxes and fees. In short, the bond is a type of insurance that protects the city if the sponsor breaks licensing laws.
How Can an Insurance Agent Obtain a Huntsville Retail Vendor Bond?
BondExchange makes obtaining a Huntsville Retail Vendor bond easy. Simply log in to your account and use our keyword search to find the “retail vendor” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
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How is the Bond Amount Determined?
The city’s clerk-treasurer will determine the required bond amount for event sponsors on a case-by-case basis. When determining the bond amount, the clerk-treasurer will estimate the total sales the event will generate and set the limit in an amount that covers the estimated sales tax that will be owed.
Is a Credit Check Required for the Huntsville Retail Vendor Bond?
No, a credit check is not required for the Huntsville Retail Vendor bond. Because the bond is considered relatively low risk, the same low rate is offered to all event sponsors operating in the city, regardless of their credit history.
How Much Does the Huntsville Retail Vendor Bond Cost?
The Huntsville Retail Vendor Bond costs either $100 or 0.5% of the bond amount, whichever is greater. BondExchange also offers monthly pay-as-you-go options for these bonds.
Who is Required to Purchase the Huntsville Retail Vendor Bond?
Huntsville municipal code 15-85 grants the city’s clerk-treasurer the authority to require sponsors of events that include retail vendors to purchase a surety bond. Only the event sponsor is required to be bonded, not the individual vendors participating in the event. For example, if an organization wants to sponsor a festival in the city and have vendors sell goods or services at the festival, then the organization must purchase a bond prior to receiving a license. The individual vendors will be covered under the organization’s bond.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Event Sponsors Apply for a License in Huntsville?
Event sponsors in Huntsville must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
License Period – All Huntsville Business Licenses expire on January 1 of each year and must be renewed before the expiration date
Step 1 – Complete the Application
Event sponsors must pay a licensing fee correlating with the event’s gross sales, as referenced in the below table.
|$0 – $9,999
|$10,000 – $19,999
|$20,000 – $249,000
|$65 + $2 per $1,000 in excess of $20,000
|$525 + 1 per $1,000 in excess of $250,000
Step 2 – Purchase a Surety Bond
Huntsville Retail Vendors must purchase and maintain a surety bond in an amount determined by the city’s clerk-treasurer after the sponsor’s business license application has been renewed.
Step 3 – Obtain a Special Events Permit
Sponsors will most likely need to obtain a special events permit. To obtain a permit, sponsors must complete the application which can be found here.
How do Event Sponsors Renew Their Huntsville Business License?
Sponsors that choose to renew their Huntsville business license can do so online here. All Huntsville Business Licenses expire on January 1 of each year and must be renewed before the expiration date. Sponsors cannot renew their special events permit, and must obtain a separate permit for each event.
What are the Insurance Requirements for Event Sponsors in Huntsville?
Most event sponsors will not be required to obtain liability insurance prior to hosting their event. However, sponsors should contact the clerk-treasurer to verify that they are not required to purchase insurance.
How Do Huntsville Retail Vendors File Their Bond?
Retail vendors should mail the completed bond form, including the power of attorney, to the following address:
City of Huntsville
Clerk-Treasurer Department, License Division
P. O. Box 308
Huntsville, Alabama 35804-0308
Sponsors can also drop it off at the clerk-treasurer’s office in person. The Retail Vendor Surety Bond requires signatures from both the surety company that issues the bond and a representative from the event sponsor. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
What Can Huntsville Event Sponsors Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, event sponsors in Huntsville must ensure that the city receives all license fees and sales taxes owed as a result of the event.
What Other Insurance Products Can Agents Offer Event Sponsors in Huntsville?
Huntsville does not require most event sponsors to purchase any form of liability insurance as a prerequisite to obtaining a business license or special events permit. However, most reputable sponsors will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Huntsville Event Sponsor Customers?
Huntsville conveniently provides a public database to search for active businesses operating in the city. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.