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Surety Bond Mistakes That Could Put You Out of Business

Posted On: September 29, 2022

Surety Bond Mistakes That Could Put You Out of Business

DMEPOS Surety Bonds are more than just a piece of paper—they are a crucial component to running your business and remaining in compliance. A simple mistake regarding your surety bonds could have devastating financial consequences, or worse...put you out of business. 

Read more about these two common surety bond mistakes and how to avoid them: 

Mistake 1: Prematurely Canceling Your Bond

Business A calls their bond provider to cancel their Medicare surety bond mid-term as they believe they have another bond elsewhere. The problem is, they don’t have another bond elsewhere. Months later, upon discovering this fact, they call their original bond provider to try to reinstate or backdate their bond policy.  

However, bonds can only be backdated 30 days, which means Business A now needs to pay back all the money Medicare has paid them for the past several months. On top of this, they lose billing privileges for the next two years and need to purchase a $100,000 surety bond for the next 10 years. The enormous long-term financial impact of this one mistake forces Business A to close their doors.

The Lesson: Avoid canceling your surety bond policy mid-term unless you are absolutely certain you have the correct coverage in place. Never put yourself in the position where you need to backdate a bond. 

Mistake 2: Forgetting to Renew Your Bond

Business B has had some staff turnover recently. Between hiring two new office assistants and an accountant, things have been a bit chaotic to say the least. Business B’s owner is feeling good about the new team and that they are on top of things...until they remember about the business insurance renewals that one of their former team members handled.  

Thankfully, their liability insurance doesn’t renew for a few months, but their surety bond expired almost eight months ago and has not been renewed. Business B now needs to pay back almost $400,000 to Medicare. While the business should survive the hit, the impact will be felt for years, and hiring additional staff members any time soon is out of the question. 

The Lesson: Assign your business insurance renewals (including your surety bonds) to a reliable team member with at least one backup person who can take the lead if the primary team member is unable to complete the task. 


To review your current DMEPOS surety bonds and ensure you have the correct coverage in place, reach out to your account manager, or contact us today at or 866.528.5055.


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