In my previous blog Surety Bond Basics - Part 1, we looked at two frequently asked questions relating to bonds. Here are several others that are also very common: Why do surety bonds need to be underwritten? A surety company must determine the risk of a loss occurring if the principal is unable to satisfy the obligation under the bond. Since a surety bond is an extension of credit, the surety company must review the principal’s financial information and business experience to determine if … [Read more...]
Archives for July 2013
Surety Bond Basics – Part 1
When agents and clients come to Goldleaf, it is often their first time working in the world of surety, and they are not even sure what a bond is or what it does. For this reason, we often find ourselves going over some very common bond basics with all of our clients. There are several commonly asked questions that I would like to address over several blog posts – starting with the following: What is a surety bond? A surety bond is a three party agreement which legally binds together the … [Read more...]
Do You Really Need All That Information?!
One of the most commonly asked questions I receive is “Do you really need all that information?!” And the answer is – YES. And it relates back to the Four C’s of surety that we discussed in an earlier blog post. Surety bonds are underwritten as an extension of credit, and the underwriting considerations are similar to those used by a banker in evaluating a customer. There are many factors involved when a surety is underwriting to determine if they are willing to entertain a particular risk – … [Read more...]