We wish we could count the number of requests we receive each week from applicants that are looking for a quick quote on their surety bond. While there are situations where a bond can be quoted relatively easily, it is important to understand that surety bonds are very different from traditional insurance products.
For smaller license and permit bonds that can be issued instantly, we are often able to provide a fairly accurate estimate of the premium cost. Although these quotes are always subject to final underwriting approval, they are typically close to what we expect the final premium to be. In many cases, we can also provide a general pricing range based on our experience. While these estimates can never be guaranteed, they often help clients better understand the potential costs associated with their bond requirement.
But why is quoting bonds so different than alternative insurance products?
At its core, surety is a credit instrument. Before a surety company can provide pricing, it must first determine whether the applicant qualifies for the bond. If the applicant does not qualify, there is no bond to quote.
Most surety pricing is based on rate filings that surety companies are required to submit in each state. As a result, while some pricing differences exist among carriers, the surety marketplace is generally much less competitive on price than the insurance marketplace. Surety companies may occasionally deviate from their filed rates for specific reasons, and some carriers have specialized programs designed to accommodate non-standard accounts. Even so, it is rare to see the level of price competition in surety that is common in insurance. Most sureties are not interested in assuming significantly larger credit risks for only a marginal increase in premium.
Additionally, information gathered during the underwriting process also impacts rates. Financial statements, work-in-progress schedules, company information, credit reports, and personal financial information are frequently necessary before a surety can accurately evaluate and quote a new program.
Because of this, Goldleaf is cautious about positioning surety as a product that can be sold based solely on price. Surety relationships are built on far more than premium. Because surety is a specialized and highly relationship-driven product, most bond purchasers are reluctant to jeopardize an established surety program over price alone.
This is where Goldleaf adds value. Our team has the experience, market access, and industry knowledge necessary to guide our agents and clients through the surety process. Whether you need assistance understanding bond requirements, navigating unique underwriting situations, or securing a competitive bonding program, Goldleaf can help.
Surety is about more than pricing. It is about finding the right partnership, securing the right capacity, and building a program that supports long-term business growth.
