Please explore our website to learn all about the Surety Industry, along with surety bond information by business type.

Also be sure to fill out an surety bond application, it is easy to do as everything can be completed online, and instant quotes are available.

Just because we are closed does not mean you are stuck. Please visit our site and learn about all the surety bond types, and when you are ready apply use our online surety bond application.

We thank you for the ability to serve you and wish you Happy Thanksgiving.

 

Think of Contract Bonds like a contractor for your building or dwelling. Contract bonds gives protection on specific contracts by assuring the project owner, or obligee, that the contractor, or principal, will guarantee performance on specified contract. The contractor shall work and pay laborers, sub-contractors and suppliers for material. Some major sub-categories for contract bonds are as follows:

1. Bid Bond is a guarantee that the contract, once awarded, will be performed at the bid amount. The bonding company, or agent, will underwrite the bond and provide the performance. The bidder becomes the contractor, or principal if awarded the contract. If required, the agent also provides payment and maintenance bonds.
2. The contractor will perform a contract under terms and conditions of its Performance bond. Simply stated, the principal shall complete the work under the terms and conditions of the contract.
3. The principal shall pay material suppliers, laborers and sub-contractor(s). Payment bonds guarantee this will happen. In some instances, the principal shall not be paid until all others are paid.
4. Maintenance bonds guarantee that materials and craftsmanship is acceptable to the obligee. Maintenance shall be performed after a specified amount of time due to lack of craftsmanship or defective material or the like.
5. Subdivision bonds guarantee improvements nearby, such as curbs, sidewalks, sewer and gutter; be it replacement or new construction. The principal shall promise to finance and construct items listed in this bond. Subdivision bonds may include construction and financing of traffic lights, drainage systems, streetlights, etc.

Commercial Bonds guarantee the principal listed on the bond will perform as specified in the bond. These are much different than the contract bonds, as you will notice just by their bond types.

1. License and permit bonds guarantee the operator shall be licensed. The licensee such as an auto dealer bond, telemarketing bond, mortgage broker bond shall perform to the terms set forth in each specific bond. 
2. Public official bond is that of the performance of a public official is guaranteed.
3. Miscellaneous Bonds guarantee lost securities. This sub-category bond includes but is not limited to utility payments, union fringe benefit contributions, workers compensation and certain leases.

There are many other sub-category bonds in both contract surety bonds and commercial surety bonds and to numerous to mention. The sub-category bonds each have their own different type of surety bond to offer. For instance there are literally hundreds of bond types in License and Permit Bonds alone. It is common that agents may deal with a sub-category bond for which they never came across before.

 

 

Perhaps the reason it is useful to know about these different bonds is that each bonding company underwrites each sub-category differently. The industry defines this terminology as “language�. The requirements for each sub-category have as many similarities as there are differences.

Pending
Alaska: House Bill 825 would require a $15,000 License bond for private investigators (or E&O insurance).
Pennsylvania: House Bill 825 if passed would require licensure and bonding of private investigators.

Dead Bills
Colorado: House Bill 1083 would have required private investigators to obtain a surety bond, or an E&O policy, in the amount of $100,000.

Commercial surety bonds have a broad range of rates lately. Bonding companies are writing premiums ranging from 1% to 20%. This 20% premium can be extremely costly even for a small bond. What does an agent look for when setting these rates? This posting will attempt to explore the manner of which bonding companies come to this conclusion. Later, we will explain how to decrease your rates.

Writing a commercial bond is not as simple as checking your personal credit. Among the many considerations are: corporate financial statements, private financial statements of owners and their spouses, personal credit of owners and possibly spouses, some general pedigree information, bond forms size and legal language, and sometime the principles professional experiences (resume). Some specialty programs may require more or less information for certain classes of business, but the above is typically what is expected to be submitted when applying for a commercial bond.

Once a surety has this information, they will qualify the applicant or decline them if they fail to meet the criteria in their underwriting guidelines.

The Application: A general surety bond application asks for information to learn the basics of the guarantee. Data such as principal / obligee contact information, bond amount, corporate and personal information and the like. Any data collected that is inaccurate or missing could cause a declination of your application for the commercial surety bond. Some bonding companies will decline if they know the obligee is unfavorable.

Financial Statements: The core decision to writing a bond is in the business financial statements. The surety will carefully review this critical information that is the basis of acceptance or declination. Handwritten ledgers are not professional and an accounts statement from the CPA will surely go a long way when applying for a bond. The accrual method is recommended as it reveals a clear view of your business. This compilation of your statements including disclosures and full notes will be orderly and easy for the surety to follow. Avoid cash basis practices. This method is unclear when it comes to balance sheets and may confuse bond producers in their thought process. Internal business financial statements are acceptable for $200,000-300,000 bonds and less but a CPA is the better way.

            Bond producers are also looking for owners’ personal financial statements as well. Net worth is highly regarded and sureties want to know if your liquid assets are enough. Assets such as life insurance, personal property and autos are not real considerations. Liquid cash and real estate ownership are the high runners and necessary.

Resume: These credentials assure the bonding company that the principal is competent in their field. The more experience you have may result in lower rates depending on the sureties’ confidence factor in your business avoiding claims.  The resume is a critical component in the application process of a new business.  Because new businesses do not have financials, Sureties rely heavily on an applicants resume in a way to get to know them.

Bond Form: As mentioned above, this is the language used when writing a bond. When the obligee creates a bond, they must precisely state what this particular bond is supposed to do. The bond is a guarantee. The specifics of the bond may determine the rate of the bond. A business class such as freight brokers is more risky than others so, the bond form must be carefully written. Otherwise claims could occur and the bond may become high risk. Bond producers view two clauses in detail. They are cancellation clause and aggregate clause.

A Cancellation Clause simply states that a surety has authority to cancel a bond. The bonding company is relieved of any liabilities. A 30 or 60 day written notice is required to the principal and obligee.

The Aggregate Clause is a statement about amount of claims versus bond amount. For obvious reasons a single claim or combination of claims cannot exceed the amount of the bond, for example a 75,000 bond may not have a claim or claims exceeding 75,000 and the surety will not pay on any additional claims. 

Personal Credit: Credit reports are deceptive in that you are mislead by thinking that the score is all that matters. Bonding companies delve deeper into items that are more significant.

Bankruptcy: A definite down side of declaring bankruptcy is that it feels like it can haunt you forever. The same holds true here in that sureties will hold you in the high risk programs until 7 years of an account’s discharge.

Tax Lien: Bond producers treat tax liens the same as bankruptcy. High risk program applies for non paid or not nearly paid at the 7 year mark for most agencies.

Civil Judgment: If you have ever had a civil judgment some bonding companies won’t write you under any circumstance. Other agents may review your explanation after judgment is satisfied and qualify you. Check with your agent if this is important to you.

Unpaid Collection: Although unfavorable, if your credit report reflects a collection but it is now paid, you may still qualify for a bond. Any unpaid collection is negative and if you are not declined, you will certainly be placed into a high risk surety bond program.

Late Child Support: You may be surprised to find that unpaid child support payments are the worst-case scenario. No bonding company will write you if you are in this circumstance and you may be forced to seek other alternatives. High risk program is out of the question for unpaid child support.

Do bonding companies look at credit scores at all? Of course they do but there are many other considerations to observe. A score higher than 650 tells the bond producer that there are little anomalies and your chances for qualifying are very good. Some agencies are conservative while others are liberal in underwriting a surety bond and their decision will vary depending on what they are looking for.

 

Often this call comes from people who have seen a sign saying “insured” or “bonded” at the locksmiths, or on advertisements in the yellow pages; after seeing this they think, “maybe my company should be bonded too.”

There are several kinds of “bonds”, one kind is a fidelity bond, but don’t be fooled by this name, a fidelity bond is actually not a bond at all, but a type of insurance. The company who is “bonded” is the beneficiary of the policy, not there clients.

At Bryant Surety Bonds, Inc. we specialize in surety bonds. A surety bond is a three-party agreement (obligee, principle and surety) that is a requirement of the obligee onto the principle. In the situation where the principle defaults, the surety will make the obligee whole again. Surety bonds cannot be issued to a company that “wishes to be bonded” as these bonds are created to guarantee an agreement.

Though you may feel helpless, there are some simple steps you can take to help the process:

1. Be sure to respond to your agents question promptly.  If an agent asks for additional information, please sent is ASAP.  And agent will not ask for additional information unless it is absolutely necessary for your approval.  Your application can not/will not be approved with out it.
2. When applying, please make sure you fill the application out in full, and that the information is accurate.  Missing information, or unclear information, will cause an agent to contact you for clarification.  Misinformation can lead to even larger issues, and blatant lies can result in fraud charges.  All of these issues slow the process and can ultimately lead to you being declined.  Please take your time, and double check the information you provide before submitting your application.
3. If you have been bonded before (or declined bonding) let your agent know this information.  The bonding industry is small.  This information can speed the process by allowing us to apply to the proper market first.
4. Overnight shipping is available.  Spend the extra money, and avoid mail delays.

We understand that many of these tips are common sense, but with so much going on, sometimes things are overlooked.  Bryant Surety Bonds will always do its part to get you approved in a timely manner; these small steps are a way that you can assist us in that goal.