Surety Bond News

A surety bond is not your typical form of insurance.

The main difference to the principal is that the principal will not be paid in anyway if their obligations are not met. A third party (the obligee) is compensated in the event of a claim.

With insurance a loss is expected by the insurance company. There is no loss expected when a surety guarantees a bond. In fact, if you do have a claim you can kiss your chances of obtaining a bond goodbye. In the current bond market, even high risk bond markets will deny you with previous claims.

Please come back soon for our next article on “The Best Way To Obtain A Surety Bond”

You can not submit to a surety directly when applying for a surety bond. You must go through an agent that is appointed with the bonding companies. How can you be sure that your chosen agency will choose a surety that is right for you and not just right for them. This article will discuss what to look for when applying for any type of surety bond.

Before accepting any quotes, be sure to find out what surety bonding company they will use to write your bond. Once you find out the name of the surety, double check with the agent that you are in fact approved at that rate, as many agents will quote you the best rate possible at first, not necessarily the one you are approved at.

If you are required to obtain a bond by any federal or state government you can be sure that the bonding company will be accepted if it is T-listed. You should check to see if the surety your agent is writing you through is on the Federal T-listed Surety Bond Companies.

If you are required to obtain bonding from a surety with a specific rating then you can always find out the rating of the bonding company from AM Best.

Every surety has different policies for underwriting standards. You will also want to make sure that your surety can do the following for your company:

Contractor Bonds

• Provide a bond line that meets your needs both single and aggregate
• Respond to bid requests in a timely manner

License & Permit Bonds

• Provide bonds for any additional states you may require
• Approval up to $100,000 total (multiple licenses)
• Offer options for clients with bad credit

If you have done your research then you will have no problem with you bonding company (provided they do not have a problem with you). If you have used the general guidelines discussed in this article you should have no problems down the road with your surety. If you have a good surety bond agent then all of this will already of been done for you. Please post a comment for any question you may have and I will be happy to answer it for you.

The conservative surety bond market is here to stay. Fortunately, some sureties are starting to loosen up with certain classes of business.

Sureties are saving time and money by allowing their most trusted/largest producing agencies to approve less hazardous classes of business in house. What does this mean for someone in the market for a surety bond? The market is making a change, for the better. The bonding companies are not as liberal as they were in years past, but are being less conservative with bond types that have only a small amount of bond claims.

JW Bond Consultants, Inc. is one of the leading online agencies, you will find us on any search engine (many times listed #1 due to our strong online presence and useful site information). This being said, we bring our sureties more business then our competitors. In return our sureties offer us larger bond lines, exclusive bonding programs, and in house authority to approve and issue bonds.

Any good agency will always keep an eye open for specialty markets. We are constantly looking for sureties to write hard to place classes of business at the best rate possible. Classes of business that come to mind are Subdivision bonds & Site-Improvement bonds. These bonds have become one of the most difficult classes of business to write and furthermore, only about 3% of the current bonding companies in the country will consider writing this class of business. These bonds are required by government entities for either new homes being developed, or simply for new public improvements made to an existing property.

JW Bond Consultants, Inc. has multiple markets that write Subdivision bonds & Site-Improvement bonds with NO COLLATERAL requirements. We can get bonds approved with aggressive terms usually within 24-48 hours.

Lastly, most difficult class of business for contract surety bonds is Multi-year service oriented contracts. JW Bond Consultants, Inc. has markets that will write 1,2 3 up to 5 year contract terms with exceptional terms. Most bonding companies pull away for any contract over 2 years. Give us a call for this incredibly difficult class of business to write. Multi-year service contracts – WE CAN DO!

One of our newest programs is our Mortgage Broker – Instant Approval Program. It has been so successful we have now introduced the program for the following classes of business:

• Mortgage Banker Bonds
• Mortgage Lender Bonds
• Surplus Lines Broker Bonds
• Title Agency Bonds

We even offer the “Instant Approval Program” to brokers/agents to add to their company website as a service to their clients. We help you add the necessary forms to your company website and your agency gets 10% commission. Cut down the paperwork at your agency now and join us as we enter the digital age. If you are an agent we invite you to apply to add instant approval to your website.

If you have having problems with your hard to place surety bonds then call us now at (888) 592-6631, one of our agents will be glad to help you place the business in the appropriate specialty market.

Many people that are required to obtain a surety bond have never heard of them. In fact, 1 out of 5 calls I receive are from a client who do not even pronounce the word surety correctly. A common question from our clients is, “Why do I need a surety bond?”.

The obvious answer is because the obligee is requiring it of you in order to do business with them. The real question is, why is the obligee requiring the bond of you? If you are in need of a commercial bond then it is not in place to cover you (the principal), but anyone you will be doing business with. Contract bonds are in place to guarantee the work will be completed per the terms of the contract. Court bonds are required for a variety of different reasons. For instance guardianship bonds are required by the court to assure the guardian will act in the best interests of the minor/incapacitated person. Other court bonds such as appeal bonds are required to ensure the defendant will not flee if found guilty.

There are numerous reasons as to why bonds are required. The best way to find out why your bond is required is to actually read a blank copy of the bond and find out exactly what it is guaranteeing. Each bond form is specific, above is only a generalization of what a bond guarantees.

If you have any questions on your specific bond type, please post a comment and I will be glad to help you better understanding of why you are required to obtain your bond.

The surety bond industry goes back hundreds of years. In my opinion, suretyship is acting like the grandfather of the insurance industry, lagging behind its’ relatives when it comes to technology. Surety bond forms are slowly being transferred to digital files, but a good portion of bonds still must be typed on the good old typewriter.

Our agency, JW Bond Consultants, Inc. is continously making an effort to bring suretyship into the new millenium. We have all of our applications online in pdf format. We even offer our clients to apply online for certain classes of business. (ie mortgage broker bond)

My point is, why is it taking the surety industry so much longer then every other? Just because it is an old business does not neccessarily mean that the people working in it should operate it the same way the previous generations did. Our office has saved countless hours by having our website automate our application process.

I am not saying that our office’s system is anywhere near that of some of the big corporations of insurance such as Geico or Allstate, we simply do not have the resources to compete with the streamlining these bigger corporations have acheived (not to mention the fact that surety bonds are underwritten in a case by case basis and can not simply have a rate applied like homeowner or car insurance). However, we are the most technologically advanced surety bond agency in the United States.

I think it is time that the bonding companies take a good hard look at what they can do to make their offices run more efficient, the digital age is here and there is no looking back. I just hope our competing agencies continue to use their same old slow paper processing, afterall it makes us look good.