The clock for build-up funds starts after which event?

The clock for build-up funds starts after which event?

• A. Judgment is entered on the bond
• B. Termination and discharge of liabilities on the bonds covered
• C. Issuance of the license
• D. Filing of the bond

Answer: (B)

The main idea is when the bond obligations are finally resolved. The clock for build-up funds starts after all liabilities tied to the bonds covered have been terminated and discharged. Once those liabilities are fully settled, there’s no outstanding exposure under those bonds, so it makes sense to begin accumulating the build-up funds for future needs. Filing a bond or issuing a license are administrative steps that occur before the bond’s obligations are fully resolved, so they aren’t the point at which the clock starts. A judgment being entered on a bond doesn’t necessarily mean everything is resolved—there can be appeals or other unresolved aspects—so it isn’t the right trigger either.

The main idea is when the bond obligations are finally resolved. The clock for build-up funds starts after all liabilities tied to the bonds covered have been terminated and discharged. Once those liabilities are fully settled, there’s no outstanding exposure under those bonds, so it makes sense to begin accumulating the build-up funds for future needs.

Filing a bond or issuing a license are administrative steps that occur before the bond’s obligations are fully resolved, so they aren’t the point at which the clock starts. A judgment being entered on a bond doesn’t necessarily mean everything is resolved—there can be appeals or other unresolved aspects—so it isn’t the right trigger either.