ARC Bonds
An ARC bond is a surety bond that the Airlines Reporting Corporation (ARC) requires before it accredits a travel agency to sell airline tickets through its system. The bond guarantees that you will report your ticket sales and pay ARC the amounts you owe under your Agent Reporting Agreement, so participating airlines get the money you collect from travelers. If you don't, ARC can make a claim against the bond.
How an ARC bond works
The bond is an agreement among three parties: you, the travel agency (principal); the Airlines Reporting Corporation, which requires the bond on behalf of its participating airlines (obligee); and the surety that issues it. If your agency sells tickets and fails to send the payments to ARC, ARC can make a claim against your bond. The surety investigates, and a valid claim is paid up to the bond amount. If the surety pays a claim, you must repay the surety.
ARC bond vs. travel agency bonds
An ARC bond is a national requirement that covers only airline tickets sold through ARC. Some states separately require travel agencies or sellers of travel to register and post their own bond, which protects customers on all types of bookings. Depending on where you do business, you may need both, so check your state's seller of travel rules too.
Bond amount and your premium
ARC sets the bond amount. New agencies must provide a bond, letter of credit or cash deposit of at least $20,000, or at least $150,000 if the agency's parent company is based outside the United States. ARC can change the amount later based on the terms of your agreement, and some agencies may qualify for a lower amount after two years. That amount is the coverage required, not the price you pay. Your premium depends on the surety's underwriting, including your personal credit and business finances. Request a quote rather than relying on a fixed rate.
How to apply
Apply for the bond as part of your ARC accreditation application, since ARC won't approve your agency without it. Start the online application with your agency's information and the bond amount ARC requires. WWIS will review your submission and help you with the quote, ARC's bond form and issuance. Approval and timing depend on the surety and a complete application.
Information needed to apply
- ARC's own bond form. ARC won't accept bonds with changes to its required language.
- Your agency's legal name and address, exactly as they appear on your ARC application.
- Your ARC agency code number, if you are already accredited, so ARC can match the bond to your file.
- Owner and business information, including personal credit and business financial statements if the surety requests them.
Keeping your accreditation
Your ARC bond must stay in force for as long as your agency is accredited, and you pay a premium each year to keep it active. The surety must notify ARC of changes to the bond, and ownership changes or growth in sales can change the amount ARC requires. Confirm current requirements with ARC before you apply or make changes.
Get help with your application
Call 888-518-8011 or email [email protected] for help selecting the bond and completing your application.
If you or your business needs help in obtaining a surety bond or commercial insurance give us a call!