Not all states require travel agency bonds—which are also known as “seller of travel” bonds. Those that do require them usually make purchasing the bond a mandatory step in travel agency licensing.
Each state (the “obligee” in a travel agency surety bond agreement) determines the required bond amount. This is also referred to as the bond’s “penal sum,” which is the most that will be paid out on a single claim. It typically is based on the agency’s dollar volume of business in the preceding 12 months or the prior calendar year.
The principal must have an active travel agency bond in force at all times in order to prevent suspension or revocation of the agency’s business license.
