We understand surety.
Especially over the last few years, we’ve learned the unexpected and unprecedented can happen. Surety bonds are there to protect your business, no matter how solid the plans are when the unexpected happens. Whether you’re a contractor, sub-contractor/trade, or property owner on a project, securing the right bonding facility is a good place to start.
Let’s start with the basics. What is a Surety Bond?
In simple terms, a surety bond is an agreement between three parties (the obligee, the principal, and the surety), while a traditional insurance policy is an agreement between two. Surety bond insurance at the core is a financial guarantee that “the obligee” can fulfill their contractual obligations to “the principal”.
At Gifford Carr, we are on your team. We take the time to get to know you and your business. Working with a trusted partner can provide a multitude of benefits to your business, especially when it comes to bonds. Bonds are a very technical product and have distinct differences from your typical business insurance. Our brokers combine the understanding of your business and the dynamics of bond applications to help present your case in setting up your bonding facility.
We understand the impact and importance of timely delivery of bonds for your business projects. Our relationships with our various surety partners and clients helps create trust which streamlines the bonding process.
FACTORS CONSIDERED IN UNDERWRITING SURETY:
Because it’s more like borrowing money than a typical insurance policy, underwriters will ask for a number of pieces of information to help them better understand your risks, including:
- Financial stability (financial statements, work on hand, account receivable and payable)
- Scope of the project and other work in progress for the contractor
- The character of the contractor including; work history, expertise, and experience
RECENT EVENTS: Bonds 101 | Surety in Ontario
No, it is not the ins and outs of a shaken not stirred James Bond martini. This is a real-talk bond conversation with industry experts – and the underwriters to understand the surety landscape in 2022.
Matthew Carr, President of Gifford Carr Insurance Groups sat down with Andrew Rohmer, VP Surety with Trisura Guarantee Insurance Company, to talk about everything from the basics of setting up your bonding facility to the state of the market and trends the industry is seeing.
Ask The Expert | Surety
Surety Bonds Solutions
What is a surety bond?
A surety bond is a three-way contract between the obligee, the principal and the surety.
- The principal: the party covered and/or who is obligated to fulfill the terms of the contract.
- The obligee: the party requesting the guarantee.
- The surety: is the party that issues the bond.
It is a promise to pay one party (the obligee) a certain amount of money if a second party (the principal) fails to meet their obligations. This can mean failure to fulfill terms of a contract, failure to complete a construction project, and can even cover instances of employee theft.
Why you need a surety bond?
A surety bond guarantees that the principal will perform the duties they have been hired to perform. Surety bonding is an essential tool that can increase your customers’ trust in your business, build your reputation in your industry while ensuring your business can operate efficiently from a cash flow perspective.
Your business may also be required to post a bind as part of your licensing requirements. These type of surety bonds typically guarantee that the principal will comply with any codes or regulations established by the obligee, who is usually a government body such as a city, town, or municipality.
Which industries typically use a surety bonds?
- Construction & Trades
- Renewable Energy
- Information Technology (IT)
- Trucking & Logistics
Why choose Gifford Carr Insurance Group as your surety partner?
- Educated and experienced brokers working our surety files
- Our lead broker spent the first half of his career working in construction. He has a clear understanding of the needs for your business in securing surety bonding.
- Timely response
- We pride ourselves on understanding the priorities of timelines for surety and work on our client’s team to ensure they have the bonding in place to move forward with projects and bids. After all, your business is our business.
- Quick set-up for new surety files
- We understand the importance to have your file set up correctly the first time, so you have the information insurers need to approve bonds quickly going forward!
- We work with ALL classes of construction and non-construction surety bonding files
- We get it. Surety is not only for construction. Understanding the process for surety enables us to apply our knowledge to a broad range of industries to secure their surety needs. Including manufacturers, IT, suppliers, engineering projects and more!