Top 10 Factors to Consider When Choosing a Surety Broker
At FCA Surety, we understand that choosing a surety broker can be a challenging proposition as there are so many choices in today’s marketplace. As such, we have taken the time to prepare a list of the top 10 factors to consider when choosing a surety broker.
1) A Focus on Bonding
There are many brokers out there but only a few who are considered true surety experts in the industry. These surety experts have a considerable advantage in terms of turnaround time, market access, professional service and pricing; all of which will benefit your business’s efficiency and bottom line.
2) E-Bonding & Surety Bonds Issued Directly in the Broker’s Office
Professional surety brokers have long-standing relationships with their preferred Surety Markets. Once this trust has been established, the Surety market will provide the brokerage firm with in-house issuance limits for your account. This means that once your bonding facility is established, your surety broker will be able to issue the bonds directly from their office without needing to seek additional approval from the surety market. This saves both time and resources allowing for quick processing of your bond needs to ensure you never miss out on an opportunity.
To streamline the process even further, over the past couple of years there has been a shift in the industry and many government agencies are now accepting e-bonds. This can help alleviate time pressures involved in the bidding process as you no longer need to send someone from your office to pick up the bond or to wait for the courier to arrive, saving both time and money. It is important that your surety broker is on top of these technological advances in the industry to make sure you are not losing time, money or opportunities unnecessarily. In Canada, professional surety brokers are typically using Signature Master by Zenix or Mobile Bonds. Check with your surety broker to make sure that they have invested in one of these providers.
Learn more: Is Your Surety Broker Prepared for E-Bonds?
3) Facility Growth
In today’s economy, the construction industry continues to grow and your bonding facility should be doing the same. Your surety broker should be completing an annual facility review with you to make sure your bond limits are keeping up with your success to be sure that when that next big opportunity comes around you will not be held up by unnecessary questions or delays from the surety market. Being proactive is a key success factor in our industry.
4) Claims Support & L&M Assistance
Professional surety brokerages will have a team of dedicated claim experts within their office that are ready to help you with any questions or issues that arise from your bonded contracts. This will include Labour & Material payment bond assistance as needed to either help you manage your payments or to make sure you are being paid in a timely manner. These departments should also have established strong relationships with your surety market’s claims department as well to ensure fast and efficient processing of any potential claims that arise before they become a more serious issue.
5) Client References
A professional surety brokerage is one that has been established for quite some time and will have long-standing client relationships with some of your industry colleagues and competitors. Do not be afraid to ask for a reference or two to check on the quality of client experience that you will be signing up for.
6) Years of Experience
While there are always a few new entries, whom never hesitate to call themselves ‘surety experts’, most surety brokerages have long-standing histories in the industry and are well known for their competence, professionalism and expertise.
7) Underwriting Background
Many of the best and brightest surety brokers began their careers on the company side working as underwriters in the surety industry. This invaluable experience provided them with a unique industry perspective in terms of how a surety market looks at your business. From this, they are able to properly assess your business from the market’s perspective and deal with any potential questions or concerns before bringing your business to market ensuring the quick establishment of a bonding facility. This has also provided these surety brokers with exceptionally strong relationships on the market side which guarantees excellent service.
Learn more: The Significance of Financial Statements for Surety Bonds
8) Association Memberships
Your surety broker should be an active member of the same associations that you participate in. These should include the various construction associations along with any industry-specific associations. In many cases, you should also expect your broker to be an active sponsor to the various industry events. As an industry stakeholder, they should be contributing and participating as much as possible to the greater good of the industry as a whole.
9) Turnaround & Responsiveness
In today’s world, things move quickly and the surety industry has really had to step up the pace over the past few years to keep up. While it is always best to give as much notice as possible, your surety broker should understand that opportunities do tend to pop up at the last minute and your surety broker should be able to turn around your bond requests within a couple of hours to ensure you never miss out on an opportunity.
10) Industry Changes
Knowledgeable surety representation is even more important during a period of evolving regulation like we are in now. A highly informed surety broker that specializes in the construction business will be able to monitor the development of the application of the new bonds under the updated Construction Act, and this may mean the difference between a flawed and a successful claim.
Why Choose FCA Surety for all of your bonding needs?
FCA Surety has been providing surety expertise to the construction and building industry for over 99 years and we have the resources to partner with construction firms of all sizes. Whether you are experienced or a first-time buyer, FCA Surety can help you obtain the surety you require, in a professional and timely manner. We offer a dedicated and seasoned surety department, so you can depend on the expert underwriting experience of our senior team.
Our services include:
- Surety bond facility review and recommendations
- Surety rates and indemnity review
- All bonds issued in-house at FCA offices
- E-bond issuance
- International bond capabilities
- Bond claim advice for contractors
- Connections to our vast network of industry professionals
If you are looking for a new surety team to manage your surety needs please do not hesitate to reach out today for a free consultation.