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December 6, 2016

Surety Bond Producer as Your Advocate

The worst outcome has happened, you have had a claim filed against your business. What to do now? As this can be a stressful time, having someone in your corner can help lift a huge weight off your shoulders. This is where a surety bond producer as your advocate can be of enormous help. A basic claim procedure begins when someone associated with the job files a claim against you. They will look over the evidence. If the claim has no backing to it, a surety bond producers acts as an advocate. The best way to help your surety bond producer is to make sure to document everything. This includes that you pay for labor or materials on time to when you complete certain aspects of the project. If you have done your end of the job, then the surety bond producer will help to prove that the claim is false. There are many attributes to look for when working with a surety bond producer, and below we have highlighted some things to consider. Therefore, if someone does file a claim against your company, you can be certain that your surety bond producer will protect you and that you...

By M L

Claims Surety Bonds

November 22, 2016

How Claims Hurt

We’ve emphasized, in previous blogs, that a contractor has control in avoiding claims. The best way to avoid having a claim filed is to make sure that the contractor fulfills and documents all contractual obligations. But, if the contractor is not able to fulfill the contractual obligations, a claim may be filed. This will hurt the reputation of the contractor in many ways. The Financial Burden of a Claim First of all, the financial burden will be evident once the contractor is found to have defaulted on the contract. The contractor may have to pay the full amount. They may also have to pay any legal fees associated with the claim. A surety bond is not meant to protect the contractor. Instead it ensure the project owner that they will not lose out on money if the contractor defaults on the contract. If the surety bond producer deems that the contractor has defaulted on the contract, they will pay the project owner. They will then seek reimbursement from the contractor. The Risk of Ignoring Claims But what if the contractor decides not to pay the claim? They may feel they weren’t in the wrong or may not have the financial...

By M L

November 8, 2016

Business Service Bond – Apply Now

The U.S. service sector is a growing industry and has expanded over the last decade. A service industry includes any form of outsourcing, such as human resources, IT, leadership development, home cleaning services, in home personal care, etc. If a company outsources, it is important that they protect themselves from any form of negligence or fraud. Benefits of Bonding So what are the benefits of requiring a bond for a business that you work with? The first is to protect yourself from liability due to an employee committing fraud when dealing with a customer. Another reason, is that you give your customers added assurance by letting them know that your employees or the businesses that you work with are bonded, which could potentially bring in more business. If a business is taking the extra steps to protect their customers, it helps to build a positive reputation. In comparison to a standard fidelity bond, a business services bond protects for on-premises incidences. Summary: The service sector is growing exponentially. Therefore, many businesses are hiring additional outside employees to continue providing their business’ services to their customers. A business services bond provides protection against any sort of fraudulent or negligent work by...

By M L

October 13, 2016

Four Myths about Surety Bonds

In the contracting world, there are some myths about surety bonds. Do you really need one or is it just an added protection, for a costly price? This leaves the contractor with a decision to make: avoid the project or work without a surety bond. Below we dispel some of these myths: The first misconception is that surety bonds are expensive! This tends to alienate many small businesses from bidding on projects that require surety bonds. Which in essence, loses them money. Usually, (depending on the credit score of the applicant), a bond premium costs between 1% and 3% of the contract sum. Another misconception is that surety bonds are not needed by large construction companies. There is also the misconception that there is a bias towards smaller companies. This is because, many think, that they are more of a risk or liability to award projects to. This myth is based on the idea that large companies won’t need to buy surety bonds because they can afford to have safeguards in place. Have you heard, from colleagues and friends, that all surety companies are equal? This is another misconception. A surety company draws its strengths from its years of...

By M L

September 2, 2016

What kinds of surety bonds are there?

Surety bonds are a financial guarantee between three parties in a legally binding contract. These three parties are the obligee, the principal, and the surety. In essence, the surety guarantees payment of a specified maximum sum or compensation in case the obligee incurs any damages or loss caused by the actions (or a failure to perform) of the principal. The Principal The principal is the person or company who has to purchase a bond. The surety then provides a financial guarantee to the obligee that the principal is financially sound to undertake the project. The Obligee The obligee is the party that requires the principal to purchase a bond. The Surety The surety is a company that guarantees the bond. Therefore, the surety also provides the financial assurance of the principal. If the principal does not follow the terms and conditions of a bond, the obligee can make a claim and collect damages. If the claims are valid, the surety will reimburse the obligee and then seek reimbursement from the principal. Surety bonds are required by those in business who provide services to consumers and government offices. Although surety bonds all have the same purpose, there are different types...

By M L

August 2, 2016

The Benefits of Insurance Agent and Surety Bond Producer Relationships

When it comes to surety bonds, insurance agents can encounter several hurdles. These can range from problems obtaining bonds, slow service or uncompetitive rates. In order to remedy this, insurance agents have two options. They can outsource their bonding business to another insurance company, with a sub-specialty in surety bonds, or develop a relationship with a surety bond producer. Although some insurance agencies may have a surety bond department, they may only be sold as a sub-specialty. When working with another insurance company, the insurance business may be lost to the outside insurance company. But this is a risk that is undertaken in order to fulfill the surety bond needs of the client. The benefits of working with a surety bond producer are numerous. Some are that insurance agents will be able to offer competitive surety bonds to their clients. They will also have access to underwriters, bond approval and issuance. Additional benefits include that the insurance agents are able to provide their clients with a link to a superior bonding experience. This is because they are able to use their relationships with a bonding professionals who has a vast knowledge of the surety markets, relationships in the industry, seasoned experience and access to Internet and electronic bonding tools. Even...

By M L

August 2, 2016

How Much Does A Surety Bond Cost?

The surety bond process can be overwhelming and confusing for newcomers. That’s why it’s important to have someone in your corner with knowledge and expertise about surety bonds. At Surety Bond Professionals, our expert agents are here to help. Many people have asked us, “How much does a surety bond cost? And what factors are involved in providing that final number?” To answer this common question, we outline some of the factors that decide how much surety bonds cost. Of course, the easiest way to determine the cost for your specific needs is to request a quote. Learn more below, or request a quote through our online system today! How much do bonds generally cost? The pricing for contract and commercial surety bonds can vary but typically falls between .5% and 3% of the contract price or bond amount, based upon the type of bond required. The exact percentage is dependent upon the surety’s assessment of the risk involved with the guarantee being provided. Some bonds are more onerous and risky than others and likewise some applicants are stronger than others. This is why each situation is unique and there is a range of product pricing. What are the...

By M L

July 21, 2016

Guardianship Bonds – Apply Now

A guardianship bond is when a court appoints a person (the guardian) to take care of the affairs of another person (known as the ward). The guardian is entrusted with taking care of the ward’s personal and financial affairs. Sadly, this does not always happen. One sometimes hears of cases where a guardian abuses their power at the detriment to the ward. A guardianship bond is usually a requirement when the court determines guardianship. Although each guardianship bond varies it is an invaluable reassurance to the family of the ward. It helps to deter those who may seek to be a guardian for their own financial benefit. A guardianship bond acts as a form of assurance that the guardian will fulfill their lawful duties in the best interest of the ward. Like other surety bonds, a guardianship bond is a three party contract between the courts, the guardian and the surety. If a ward suffers at the hands of the guardian, the guardianship bond will cover the damages and then will demand compensation from the guardian to recoup the surety’s money. Here are five times where a guardianship bond can be a lifesaver: 1. Incompetence: Being a guardian can be...

By M L

July 18, 2016

What You Need to Know About Surety Bond Insurance

As many people may know, a surety bond is a written agreement guaranteeing the satisfactory performance of a contractual obligation. This agreement provides for monetary compensation in the event that a principal fails to accomplish the job per specifications in the bond. There are many who may confuse surety bonds with insurances. They may think that their purpose are alike, but this is not the case. Here’s what you need to know about surety bond insurance. There are three parties in a surety bond contract are: The Principal – the party that purchases the bond The Obligee – the party that requires the bond The Surety – the party that issues the bond Do I need a surety bond? Do I need a surety bond? When do I need it and what are the risks if I don’t get one? These are questions which you may have pondered. Well, have no fear! Below we have highlighted some situations where you may need a surety bond. Licensing: Many industries require you to get a surety bond. This ensures that the applicant adheres to specific industry regulations. If they do not adhere to, then the someone may file a claim. Specific to...

By M L

July 15, 2016

Does Buying a Surety Bond Really Matter for Your Business?

Although surety bonds are becoming more common in society, many people are not familiar with them. Yet, surety bonds are an important safeguard and/or necessity for many business owners, companies, federal and state government agencies. Bonds can play a very crucial role in business. They can protect a business and create trust when dealing with prospective clients. Bonds are a legal requirement by states for various industries. What is a surety bond? A surety bond is an agreement between three parties: the principal, surety and obligee. The surety provides a financial guarantee to the obligee (i.e. a government agency) that the principal (business owner) will fulfill any contractual obligations. The purpose of a surety bond is to guarantee a principal’s integrity, performance and financial responsibility. The main purpose of a surety bond is to make sure that the obligee will perform their contractual obligations. It also guarantees compliance with a law or contract For instance, a small contractor renovating a living room, does not finish the job according to the contract. Or maybe they fail to abide by the state laws and regulations. In both cases, they can have a claim filed against them by the consumer, asking or demanding...

By M L

Blog

Surety Bond Producer as Your Advocate

How Claims Hurt

Business Service Bond – Apply Now

Four Myths about Surety Bonds

What kinds of surety bonds are there?

The Benefits of Insurance Agent and Surety Bond Producer Relationships

How Much Does A Surety Bond Cost?

Guardianship Bonds – Apply Now

What You Need to Know About Surety Bond Insurance

Does Buying a Surety Bond Really Matter for Your Business?

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