What To Look For In A Surety Bond Broker?

Things To Know Before Moving Ahead

It does not matter how large or small your surety bond might be, choosing a reputable and reliable bond broker and surety company is imperative to your success. If you are not familiar with a Canadian surety bond provider like ConstructionBond, you should know that this is a business, who is well informed about surety companies. He or she will guide you when it comes to finding and acquiring the surety bond.

Although the mass majority of Canadian brokers are incredibly knowledgeable and immensely helpful, extensive and precise research are necessities. Below, you will learn more information about what you should look for before you hire a bond broker. After you understand how to pick the right broker, make sure you checkout our surety faq page to learn about other areas of bonding such as rates, turn around times, claims, and requirements. The more you know, the more it will benefit your business and the easier it will be to get through the tedious surety underwriting process.

 

1. What Does The Surety Do?

First and foremost, you should know that a surety is the group that provides the surety bond. Of course, the company does so much more than that. They also put their name out there for you and take on some of the risk involved. Depending on the project or reason you need the bond, you will likely be forced to acquire a bond with a specific monetary value. Since this value is normally substantially, the surety will cover most of the expense. Meanwhile, you’ll be required to pay a small percentage of that total. The surety will set this amount and it will depend on an array of variables, including your personal credit score.

Just remember that the surety is also there to protect the developer, owner or consumer. If you do something wrong or fail to abide by the initial agreement, the surety company will be required to hold you responsible in one way or another.

 

2. Check For Proper Licensing

When selecting a bond broker, the first and most important thing that you want to look for is a license. Some brokers will only be licensed for certain provinces. It will be imperative that bond broker is licensed for the province that you are seeking a bond in. The good news is that there is an abundance of modern day brokers that are licensed in all provinces. Be sure to confirm the licensure online, before moving any further along into the process.

 

3. Experience Can Be Everything

Another very important thing to consider when hiring a bond broker is experience. Just because a bond broker has only been in business for a year, this does not mean that he or she is not good at what they do. However, experience is always preferred, because this means that they are going to have deeper contacts with the industry. A more experienced broker has probably worked with various companies before and this is going to make the whole process much smoother and easier for you.

Of course, you will want to make sure that the broker has experience working specifically with surety. Many brokers also delve into insurance. In order to ensure that the broker is able to serve your surety needs effectively, make sure he or she has dealt with surety products for a lengthy period of time.

 

4. Speak With Your Contacts

As a contractor, you are probably in contact with several other contractors on a daily basis. You would be surprised at what information these other contractors could provide you with. Do not be embarrassed to ask these contractors about bond brokers. It is very likely that they have been in the same situation that you are in right now and they could probably give you great referrals to many different bond brokers. If this is the case, this will make your whole search much faster and easier.

Make sure that you take their advice and investigate their recommendations a little further, before plowing ahead.

 

5. Online Research

The Internet is full of useful knowledge and it would be your fault, if you did not take advantage of this. Many respectable businesses and companies have websites where customers comments on their products and services. Well, the same thing will apply to bond brokers. Before hiring any bond broker, make sure that you do a quick Internet search of this agent.

By doing this, you will be able to read what other customers have said about the services that he or she provides. If you discover that previous clients have been unimpressed with the broker’s work, you should do your best to find another professional. Stick with those that have proven their worth time and time again in the past.

 

6. Turnaround Times

Obtaining a bond is a crucial part to the success of your business. This is why it is important that your agent and Surety Company provide you with bonds in a speedy manner. As long as you are providing your agent with all the information that he or she needs in a timely manner, then he or she should have a quick turnaround time.

Of course, turnaround times are going to vary depending on the type of bond that you are seeking, but this something that you must check out before hiring an agent. When it comes to bid bonds, a slow broker could result in your company losing the project! Make sure that your broker is willing to work just as hard and quicker as you are!

 

7. Ask For References

You are probably going to meet and speak with several different agents, before you decide which one is the best. It is always a good ideal to ask the agents for a list of their references. This will be other people that the agent has worked with or is currently working with. With this contact information, you will be able to get in touch with these people and see what they have to say about the agent you are considering. If these individuals have a lot of compliments to give to the surety agent, you can rest assured knowing that he or she will deliver a worthwhile, pleasant experience.

 

8. Shopping Around For Rates

When it comes to hiring a bond broker, you should remember that the cheapest option might not always be the best option. However, you should be able to find a good reputable agent at an affordable rate. Of course, this is going to take some time and research. Just remember that the rates will depend on several different factors, including your personal credit score standing.

 

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