Who Needs to Bond

What is a game of chance surety bond?
A surety bond is a three party contract in which a Surety company guarantees to a third party (Obligee) that a company (Sponsor) will fulfill some obligation. A Game of Chance surety bond is a particular type of surety bond that is required under certain circumstances by the states of New York and Florida guaranteeing that the sponsor will pay the prizes offered in the sweepstakes.

Why do you need them?
New York and Florida state law require any company that is offering a sweepstakes with a prize pool in excess of $5,000 to register and bond the promotion with the state. The laws are intended to protect consumers in those states from marketers who may offer prizes as an enticement to consumers, but default in their obligation to award such prizes to rightful winners.

When do you need them?
The deadline for filing the registration and surety bond in New York is thirty days (30) prior to the beginning of the promotion. The deadline for filing the registration and surety bond in Florida is seven (7) days prior to the beginning of the promotion.

Also, if a sponsor has run chance promotions in Florida for five consecutive years without incident, they may be eligible for a bond waiver. However, even if a sponsor receives a bond waiver, they still need to register the promotion. 

Why should you obtain bonds from HCCSU?
When you choose HCCSU you get superior customer service, very competitive pricing, and twenty-four hour service. More importantly, when you choose HCCSU you are choosing to work with a company that has over twenty years of experience in the promotion-insurance industry.

As your promotion insurance experts, we provide an additional layer of service by acting as your promotional risk managers. Our experienced staff reviews the promotion specifics and analyzes the rules to help you identify potential inherent risks and identify ways that these risks can be avoided or minimized.  [Note that this service is not in the nature of legal advise, nor shall HCCSU be liable for any errors or omissions in promotional documentation.]

HCCSU is the category leader for promotion-related insurance products. Our products include game of chance bonds as well as other products such as prize indemnity and over redemption insurance.

What do we need to do to obtain bonds from HCCSU?
To obtain bonds for a promotion, provide to HCCSU via fax (781-994-6001 or 781-994-6201) or email the following documentation:
1) Completed HCCSU Bond Order Form
2) Final sweepstakes rules
3) Recent financial information from the sponsor *
4) Signed indemnity agreement

* In most cases HCCSU can obtain financial information automatically online or run a D&B report.

When HCCSU has all the information required, we will issue the signed and notarized bonds on behalf of our surety company. The bonds then need to signed and notarized by the sponsor (or agency on behalf of the sponsor). Once this has been done, the bonds are ready to be filed along with the registration forms with the states.

What happens when the sweepstakes is over?
Once the prizes have been awarded and the winners' list has been filed with the states, the states should send you notification that they have closed the file. New York should send a letter referencing the promotion. Florida should normally send a letter and the original bond back. All you have to do is send HCCSU a copy of the release letter and the original bond if you receive it so that we can let our surety company know that their obligation is over.