How To Choose A Provider For Your Next Surety Bond

Find the right Surety Broker

Have you recently been notified that you’ll need to acquire a surety bond? This is something that many Canadians will encounter and it can feel like a daunting objective to achieve. The truth of the matter is that the process can be simplified easily, if you’re able to find a worthwhile surety provider. Of course, this process is easier said than done. In fact, it is complicated substantially, by the sheer number of providers within Canada. Below, you’ll find a breakdown of the most notable characteristics to look for, when trying to choose a surety company or you can refer to Wikipedia to get a brief.

Surety Experience

When scouring Canada’s surety market, you will find that there are numerous providers. However, some of these groups will offer insurance and surety. Although this can be convenient for those that require both, it is generally best to look elsewhere. This is the case, because these groups often put more emphasis into their insurance products and focus very little on surety. With a surety provider, who completely dedicates him or herself to sureties, you can rest assured knowing they’ll be thoroughly knowledgeable in the field.

This will give them the ability to serve you better than the alternatives.

surety company experience

Business Longevity

One thing that should help you determine if Surety Company is a suitable option for you is the length of time that the company has been in the surety industry. This factual data will definitely tell you something about the way the company conducts business, fulfills contracts, and addresses issues that may occur between the principal and obligee.

While, the company’s time in business does not only reflect their ability to provide outstanding service, it does help. Of course, you should not always rule out a surety startup business, because it may still be a suitable candidate.  

Excellent Customer Service

Dealing with surety bonds can be confusing. The surety company that you choose should be willing to work with you and answer any questions that you have in a timely manner. Remember that it never hurts to test a surety company. For instance, you can ask them a question when you already know the answer just to see how they respond. This will automatically let you know if the company is trustworthy or not.

customer service from brokerage

Knowing Your Bonds

Some surety companies only have experience dealing with certain types of bonds. When choosing a surety bond company, it is imperative that you make sure that the company has experience with the type of bond that you are looking for. This will ensure that you save yourself a little bit of time and hassle. The provider should also be familiar with your company’s industry and line of work.

Contact

Eventually, you’ll need to make contact with the potential issuer. During this conversation, you can learn a substantial amount about this group or individual. First and foremost, you’ll want to ask them for references. If they’re unwilling to provide you with a reference or two, you should take notice and go elsewhere! At the same time, you should make sure that you feel comfortable with this individual. Have they put your mind at ease? If so, you’re well on your way!

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Examining The Diverse Selection Of Surety Bonds

How These Surety Bonds really work and a bit about the fundamentals!

There are thousands of different surety bonds, which are commonly used within the country of Canada. At the same time, there are numerous companies and brokers that offer these bonds. As someone, who is unfamiliar with surety bonds, the diverse nature can be fairly frightening. However, once you begin to delve into the basics of each type, you will find that surety isn’t entirely complex. Below, you’ll discover a breakdown of some of the most common surety bond types.

The Fundamentals

Regardless of the specific type of surety bond that you’re interested in, there are some fundamentals, which are fairly universal amongst all bonds. First and foremost, the Canadian government requires many bonds in various situations. Secondly, these bonds are typically put in place to provide protection to the consumer. Thirdly, each bond has three parties. These will be examined in greater depth below.

  • Surety – The surety is the issuing company. They put their name on the line for the principal, who receives the bond. If the principal and obligee wind up in a dispute, the surety will be responsible for determining the outcome.
  • Principal – The principal is the person, group or company that must purchase the bond. Within the surety bond contract, the principal will be responsible for meeting demands, living up to expectations and fulfilling duties in a timely manner.
  • Obligee – The obligee is the group that is protected by the surety. If the principal fails to fulfill their duties in any shape or form, the obligee will be able to file a claim with the surety provider in an attempt to acquire reimbursement for their losses.

Although the surety remains the same, the principal and obligee are interchangeable and depend solely on the type of bond in question.

Construction Bonds

When most people think about surety bonds, they immediately focus on Canadian’s construction industry. This is the case, because construction bonds are amongst the most commonly used surety bonds in Canada. Within this specific category, there are several different types of construction bonds, including bid, performance, supply, and maintenance bonds. In this specific scenario, the construction contractor is responsible for acquiring the bond, which will then protect the developer, supplier, or laborer.

construction bonding

Court Bonds

Court bonds are another type of surety bond, which is frequently used in Canada. Individuals and companies can use this type of bond. The court bonds are incredibly important, since they help to keep the court system from being overwhelmed with unnecessary lawsuits from unreliable individuals. Within the court environment, there are two main categories of bonds, including probate or fiduciary bonds and judicial bonds.

Appeal bonds and bail bonds fall within the judiciary category. The appeal bond is required, when you wish to appeal a court ruling. Fiduciary bonds and probate bonds go hand in hand. They’re used when someone wants the court to appoint them as a guardian over another individual. The bond is set in place to protect the minor, elderly or incompetent individual from being swindled by the appointed party.

court surety bond

License Bonds

License bonds are another type of surety bond, which is prevalent in Canada. Professionals and businesses that desire to acquire their license use this bond. Before submitting the application for the license, these individuals will need to obtain the bond for the specific amount required by their provincial or the federal government. Furthermore, it is always encouraged to refer to the CCDC to know exactly who the right company is for your bond. This not only limits risk, but educates the reader.

licensing bonding canada

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