If you are applying for a license or permit that requires a surety bond, it is essential that you hire an experienced surety bond producer to handle the details. For example, if your business requires workers' compensation coverage and you need to obtain this coverage from an insurer, there's no way for you to submit the documents yourself. Surety bond producers serve as your interface between insurers and bonding companies.
Besides being bonded themselves, not all agents have enough expertise in the insurance industry to fully understand what they are doing when working with professionals in that industry. This can result in substandard service or complete failure of the transaction resulting in delays, higher premiums, and even denial of coverage.
Who is a surety bond producer?
The surety bond industry is not regulated by any state or federal agency. Because of this, the term "surety broker" also refers to an independent contractor who sells and services insurance-based financial products called 'surety bonds'. Surety brokers do not work for a specific company but instead represent many different companies and their associated surety bond programs. They help customers find the best program to meet their needs while providing outstanding service.
When you purchase a contract that requires a surety bond, it can be confusing knowing which questions to ask or finding all the information about your protection in one place. Professional agents will answer your questions, communicate with you throughout the application process and keep you updated when something changes.
These professionals are your advocate and they will make sure you get the best protection at the most competitive price. And if problems arise, they know how to work with both parties to find a solution that benefits everyone involved in performing the contract.
Some agents may also place contracts without requiring any down payment or cost upfront. Agents can facilitate transactions between you and even larger insurers, giving you access to more potential bond buyers than ever before. It is not uncommon for large companies like this to offer discounts of five percent or more on your premium because they know they can take advantage of economies-of-scale purchasing power by underwriting many different types of bonds all at once.
A surety bond is a written guarantee that a party will fulfill its obligations under a contract. It is a financial agreement between three parties: the principal, or the party who needs to have something guaranteed; the obligee, or the individual or company that requires the financial safeguard against non-performance of duties under a contract; and finally, the surety, which is actually the insurance company providing this safeguard.
Like most other things in life, security can be expensive. In order for you to get your business started with minimal out-of-pocket expenses, you have to have some assurance that you're going to recoup those costs through the fees charged on your contracts. Surety bonds are essentially guarantees from an insurer that if you don't perform on a contract, the surety will refund the obligation to the obligee.
The answer is absolute yes. Surety bond producers have a set of skills that can save you time and money while putting your company's best interests first, every step of the way. These professionals know how to establish you with insurers, help facilitate transactions between them and ensure that coverage is current.
They are well-versed in the industry and they understand how to get things done correctly, without delay or confusion. Hiring one will give you access to all the services they provide for many types of contracts at once.
You'll receive the personal attention you couldn't find anywhere else, along with competitive pricing on every contract, no matter how large or small it may be.
If there is ever any sort of problem-whether it's related to coverage or obligation-an agent can act as your intermediary, working with all parties involved to find an agreeable solution that works for everyone.
A surety bond producer has the knowledge and experience to complete a surety bond application quickly and accurately. They can also help you to apply for multiple types of bonds at once, which saves time and money. When the application process is cumbersome or complex, hiring a renewable energy surety bond producer can be well worth it!
Producers of surety bonds need a license to sell, underwrite and service contracts. In some states, this license is known as a bail bond license or an insurance producer's license.
In order to receive their licenses, applicants must pass a state examination administered by the National Association of Insurance Commissioners (NAIC). Applicants may also have experience selling insurance or other financial service products, which can substitute for specific educational coursework. Applicants must have three years of experience in the last six while taking the examination. After passing the exam, surety bond producers must also meet state-specific continuing education requirements to renew their licenses every 1-3 years.
Not all individuals who work in the surety bond industry are required to have a license. Those who just sell bonds and do not service or underwrite them only need to register with the state as an insurance agent.