Contract Postal Unit Bond

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What’s a USPS Contract Postal Unit?

Contract Postal Units (CPUs) are sites that are either leased or owned by suppliers. The supplier operates the space, and the U.S. Postal Service (USPS) provides branding rights and signage. Suppliers sell USPS products and services, such as stamps, stamped envelopes, postal cards, USPS tracking, and Priority Mail, to the public.

Other CPU-provided products and services include:

  • Priority Mail Express Service
  • First Class Mail Service
  • Standard Post
  • Certified Mail
  • Insured Mail
  • Return Receipt
  • Registered Mail
  • Signature Confirmation
  • Priority Mail International
  • Priority Mail Express International

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Quick Takeaways

  • A Contract Postal Unit bond is required for all Postal Unit Suppliers.
  • A CPU bond allows suppliers to operate supplier-owned or supplier-leased sites (CPUs) under contract with the USPS.
  • This bond is an agreement between the USPS, a supplier, and a surety company.
  • Your bond premium could cost as low as 1% of the total bond amount.

What is a Contract Postal Unit bond?

The USPS may require suppliers to obtain and post a contract surety bond to provide their products and services for the public. A Contract Postal Unit bond allows suppliers to operate supplier-owned or supplier-leased sites (CPUs) under contract with the USPS.

Rather than being owned and operated by the USPS itself, sites are operated by non-employees and located inside private businesses (like colleges and supermarkets). Suppliers agree to sell products and services at the prices set by the USPS and meet other essential criteria.

How does a CPU bond work?

A CPU bond is an agreement among three parties:

  • USPS: The obligee that requires the bond
  • Supplier performing postal services: The principal who obtains and posts the bond
  • Surety: The financial organization that guarantees the bond

A contract postal unit bond is a contract that guarantees that the supplier will fulfill the duties outlined in the agreement, including accounting for USPS-provided supplies and their money. Essentially, this bond protects the USPS from any financial loss the supplier may cause.

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The USPS may file a claim on the CPU bond if the supplier breaks the contract terms. If the surety company finds the claim valid, they may pay the USPS for their losses. The supplier will then need to pay back the surety for the amount they covered.

Why is a Contract Postal Unit bond required?

A Contract Postal Unit bond is required for all Postal Unit Suppliers. It guarantees that the principal faithfully delivers, pays for, and accounts for money, postage value, and other property throughout the contract term.

How much does a Contract Postal Unit bond cost?

CPU bonds can vary significantly in cost, depending on your credit score, personal and business financials, and bond amount. The CPU bond minimum is $10,000. And the cost to you could be as low as 1-3% of the bond amount (so, in this case, $100-$300). You may receive a discount for the second and third years of a three-year term.

CPU Bond Requirements and Terms

Initial CPU bond terms are three years. Then you may renew the bond annually. The three-year premium is often required upfront and is non-cancellable. After the three-year term ends, your surety may cancel the bond by giving the Postal Service and the principal (you) a 120-day written notice.

Get a Contract Postal Unit Bond

Apply online today for a Contract Postal Unit bond in your state. If you have any questions about the application process, don’t hesitate to reach out to ZipBonds directly. Our goal is to get you bonded in a flash.

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About ZipBonds.com

Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”

Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.