Hey guys, were a student marketing group at the University of Missouri who is trying to gather some research for a project. If any insurance agents can help us with these questions about surety bonds and their business, we would greatly appreciate it!
Questions:
When assisting clients, what factors help you decide from whom to get a surety bond? And why is that important?
What percentage of your business includes surety bonds? And what is the most common form of bond?
What do you consider is the most convenient way to receive information about surety bonds?
Thank you!
Surety Bonds
Moderators: Josh, independent guy
Re: Surety Bonds
Aptivemedia:
We specialize in surety bonds and insurance for contractors and maybe I can help.
"When assisting clients, what factors help you decide from whom to get a surety bond? And why is that important?"
The question does not make sense. Surety bonds are required by a third party, such as a municipality for a public works contract, a private developer that wants the assurance of a bonded contractor, a court or a licensing authority. The last two are examples of commercial surety bonds whereas the first two are contract bonds.
"What percentage of your business includes surety bonds? And what is the most common form of bond?"
This depends on the agency's specialization. I guess that the average main street commercial lines agency generates very little premium from bonds. Overall, bonds represent a small percentage of the overall marketplace in comparison to all insurance premiums. Our agency concentrates on performance and payment bonds for contractors that generate under $100 million in annual revenue.
"What do you consider is the most convenient way to receive information about surety bonds?"
Most bonds are a form of credit, not insurance policies. Contract bonds are in a sense the seal of approval from a third party (the surety) that the contractor/principal is qualified to complete the project in question. Unlike most lines of insurance, contract bonds are underwritten to a 0% loss ratio, in theory. You can find more information at the Surety Information Office at sio.org or the National Association of Surety Bond Producers at nasbp.org.
Good luck on your project.
Regards,
S. Zinecker
We specialize in surety bonds and insurance for contractors and maybe I can help.
"When assisting clients, what factors help you decide from whom to get a surety bond? And why is that important?"
The question does not make sense. Surety bonds are required by a third party, such as a municipality for a public works contract, a private developer that wants the assurance of a bonded contractor, a court or a licensing authority. The last two are examples of commercial surety bonds whereas the first two are contract bonds.
"What percentage of your business includes surety bonds? And what is the most common form of bond?"
This depends on the agency's specialization. I guess that the average main street commercial lines agency generates very little premium from bonds. Overall, bonds represent a small percentage of the overall marketplace in comparison to all insurance premiums. Our agency concentrates on performance and payment bonds for contractors that generate under $100 million in annual revenue.
"What do you consider is the most convenient way to receive information about surety bonds?"
Most bonds are a form of credit, not insurance policies. Contract bonds are in a sense the seal of approval from a third party (the surety) that the contractor/principal is qualified to complete the project in question. Unlike most lines of insurance, contract bonds are underwritten to a 0% loss ratio, in theory. You can find more information at the Surety Information Office at sio.org or the National Association of Surety Bond Producers at nasbp.org.
Good luck on your project.
Regards,
S. Zinecker
Re: Surety Bonds
We are a surety bond only brokerage/agency, so bonds are our only business.
When assisting clients, what factors help you decide from whom to get a surety bond? And why is that important?
For most agencies, this is largely dependent upon a) the amount of commission they will receive from the surety carrier and b) the appetite of the carrier for a specific type of business and the credit worthiness of the applicants. Typically if your account has credit issues or poor financial statements you are relegated to going through a specialty program unless you have direct access to such programs like we do.
What percentage of your business includes surety bonds? And what is the most common form of bond?
We are 100% Surety Bond driven. The most typical form type is a bit harder to answer...There are three categories of Surety to be taken into account. Commercial, which includes License, Permit and Miscellaneous, Contract, which includes Payment, Performance, Maintenance/Guarantee and subdivision and Court, which includes Probate and Judicial. Each line has its own leaders and common bond type, in each jurisdiction. Contract surety definitely leads the pack as to bond amount size, however Court bonds can also be very sizable.
What do you consider is the most convenient way to receive information about surety bonds?
As with anything else the internet is chocked full of information, not always correct, but the reader can research to validate the accurateness of the information.
If you need any different information, please feel free to contact me directly.
Michael Neschke
mneschke@A1SuretyBonds.com
www.A1SuretyBonds.com
When assisting clients, what factors help you decide from whom to get a surety bond? And why is that important?
For most agencies, this is largely dependent upon a) the amount of commission they will receive from the surety carrier and b) the appetite of the carrier for a specific type of business and the credit worthiness of the applicants. Typically if your account has credit issues or poor financial statements you are relegated to going through a specialty program unless you have direct access to such programs like we do.
What percentage of your business includes surety bonds? And what is the most common form of bond?
We are 100% Surety Bond driven. The most typical form type is a bit harder to answer...There are three categories of Surety to be taken into account. Commercial, which includes License, Permit and Miscellaneous, Contract, which includes Payment, Performance, Maintenance/Guarantee and subdivision and Court, which includes Probate and Judicial. Each line has its own leaders and common bond type, in each jurisdiction. Contract surety definitely leads the pack as to bond amount size, however Court bonds can also be very sizable.
What do you consider is the most convenient way to receive information about surety bonds?
As with anything else the internet is chocked full of information, not always correct, but the reader can research to validate the accurateness of the information.
If you need any different information, please feel free to contact me directly.
Michael Neschke
mneschke@A1SuretyBonds.com
www.A1SuretyBonds.com