Considerations when shopping for Surety Bonds

As a consumer of any type of purchase, the first thing that comes to mind for consideration is the final cost of the product. This same methodology rings true when shopping around for your surety bond needs, but this should not be the purchaser’s only concern. Aside from the bottom-line cost of the bond, there are several other factors that should be taken into account before settling down with the agency that is writing your bond. These include the surety’s financial strength, the requirements that must be met for the renewal of the bond, as well as attentiveness from the agency that will be writing the bond.

A good rule of thumb when doing a background check on a potential surety is looking up the Federal Treasury list. Every year surety companies are rerated by organizations like A.M. Best. They are given a letter grade that corresponds with the information submitted. Any agent worth a grain of salt will have this information readily available for you, as they represent the surety.

It is a good idea to find an agency that has experience in the industry that you are getting your bond in. The more experience the agency has will ease the transition and help with the expedition of the bonding for your industry.

When it comes down to the requirements that must be met for the renewal of the bond, there is a considerable difference from company to company. Some sureties will ask for periodical financial updates on the account that they have with their clients. These include, but are not limited to business financial statements such as balance sheets and profit and loss statements, credit reports as well as personal financial statements for the owner’s of the company. These updates are used for the guidelines that are established by the bond companies themselves, if at any time the requirements are not met, the bond will simply be terminated despite the how long the bond has been continuing.

Perhaps one of the most important and overlooked factors when determining a bonding agency is their customer service. Don’t be afraid to ask for referrals and client testimonials from the agency. Bond agencies should provide friendly customer care service. Another consideration should be the ability to quickly and efficiently turn bonds around and get them to their clients, especially if it is a contract bond. A strong relationship with a good agent can even yield helpful advice and alternatives even if they are unable to get to provide the desired bond.

Just like anything else that is purchased, there is more to buying a surety bond then just the cost of the bond itself. It is always a wiser decision to weigh all of these factors when considering any potential agency providing bonds so that you get a complete package that is right for you.