Travel agents handle large amounts of money that must be delivered as payments to the companies providing services for the traveler.  Therefore, all the travel agents must take out a seller of travel bond.  If a travel agent fails to forward funds to the appropriate company, the bond allows the company to file a claim against the bond.

Usually, the seller of travel bond is required by the state or locality in which the travel agency is based.  However, service companies such as airlines or hotels might also require the bond to do business with a travel agency.  Bonds encourage agencies to act ethically and appropriately forward their customers’ money to the correct parties.

The seller of travel bonds are usually purchased through companies that specialize exclusively in selling surety bonds.  The applicant will be subject to an extensive credit check and a financial survey to confirm that s/he is financially stable enough to pay the full value of the bond if a claim is made against it.