It’s no secret that the surety industry is rather dull, which is why insurance agents frequently overlook surety bonds. However as a professional who works in the surety market, I think a thread on surety bonds could definitely benefit the users of this forum.
By definition, a surety bond is not a form of insurance but a line of credit. When a party enters into a contract, the bond acts as a financial guarantee that the specific language in the contract will be upheld. Bonds do so by creating a mutual agreement among three parties who are legally bound together.
The principal purchases the bond to guarantee his or her work will meet the standards set forth in the bond. If the principal fails to do so, the bond amount can be used to reimburse harmed parties for losses.
The obligee requires the principal to purchase a bond to protect against fraudulent behavior and financial losses. This is usually a government agency.
The surety is the company that issues the bond, thus providing a financial guarantee that the principal has the ability to perform the job as required.
The price of a surety bond is primarily based on the principal’s credit score. As a general rule, if the principal’s credit score is above 700, the applicant can expect a premium that’s 1 to 3% of the bond amount. The lower the credit score, however, the more an applicant will have to pay for the bond.
Exclusive Surety Bond Broker Program
It’s becoming increasingly common for insurance agents to offer bonding services to clients as a way to better serve their needs — and therefore improve their professional relationships. To help insurance agents meet this need, SuretyBonds.com has recently set up an exclusive broker program. By joining the program, insurance agents no longer have to lose business to competing agents who have access to bonding services.
The SuretyBonds.com Broker Program Advantage
For Insurance Agents:
Each insurance agent gets a personal broker liaison.
We offer very competitive commission rates for agents.
Signing up is easy, and no contracts are involved.
We’ll write any bond; we don’t require a minimum premium.
For Your Clients:
We can issue a bond the same day payment is received.
In most situations clients can have their bond within 24 hours of their application.
We offer fast, educated and reliable service that can’t be matched.
SuretyBonds.com works with more than 20 underwriting firms to find the lowest rates.
Unlike other surety companies, we don’t charge broker fees or other extraneous charges.
By definition, a surety bond is not a form of insurance but a line of credit. When a party enters into a contract, the bond acts as a financial guarantee that the specific language in the contract will be upheld. Bonds do so by creating a mutual agreement among three parties who are legally bound together.
The principal purchases the bond to guarantee his or her work will meet the standards set forth in the bond. If the principal fails to do so, the bond amount can be used to reimburse harmed parties for losses.
The obligee requires the principal to purchase a bond to protect against fraudulent behavior and financial losses. This is usually a government agency.
The surety is the company that issues the bond, thus providing a financial guarantee that the principal has the ability to perform the job as required.
The price of a surety bond is primarily based on the principal’s credit score. As a general rule, if the principal’s credit score is above 700, the applicant can expect a premium that’s 1 to 3% of the bond amount. The lower the credit score, however, the more an applicant will have to pay for the bond.
Exclusive Surety Bond Broker Program
It’s becoming increasingly common for insurance agents to offer bonding services to clients as a way to better serve their needs — and therefore improve their professional relationships. To help insurance agents meet this need, SuretyBonds.com has recently set up an exclusive broker program. By joining the program, insurance agents no longer have to lose business to competing agents who have access to bonding services.
The SuretyBonds.com Broker Program Advantage
For Insurance Agents:
Each insurance agent gets a personal broker liaison.
We offer very competitive commission rates for agents.
Signing up is easy, and no contracts are involved.
We’ll write any bond; we don’t require a minimum premium.
For Your Clients:
We can issue a bond the same day payment is received.
In most situations clients can have their bond within 24 hours of their application.
We offer fast, educated and reliable service that can’t be matched.
SuretyBonds.com works with more than 20 underwriting firms to find the lowest rates.
Unlike other surety companies, we don’t charge broker fees or other extraneous charges.
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