An underwriter performs the analysis of whether to assume the risk of the Sponsor’s loss and compensates for the loss under the terms of a surety bond. A surety bond underwriter at a surety company reviews the Official Rules of a sweepstakes to determine whether it will underwrite the promotion.

Underwriting occurs in order for a sweepstakes Sponsor to obtain surety bonds to conduct sweepstakes. Surety bonds are required to comply with sweepstakes laws in the states of New York and Florida.

For approved promotions, surety underwriters determine the bond limit (the dollar total of the prize for monetary prizes) and the bond premium for the promotion period.