How to Choose a Surety Bond Company

If this is the first time you’re in need of a surety bond, you might not know where to start. How can you tell if a provider is reputable? After all, a simple online search will bring up dozens of companies, and you want to feel confident about your choice. Use the guide below to choose a surety bond provider that’s right for your business.

Where to Get a Surety Bond

Any surety company that meets your state’s licensing requirements can help you get bonded. Proper state licensure is the most important thing to look for at the start of your bond purchasing process. But this factor alone still leaves you with many businesses to review before deciding which one is right for your needs.

Surety Company, Agency, or Provider. What’s the Difference?

Let’s start by clarifying some terminology you might come across while you’re doing your research.

  • Bond Company: This refers to the company issuing the bond. Not all bond companies sell directly to the public. Also called the carrier, the bond company is who you’ll work with if a claim is filed against your bond.
  • Bond Agency: This is the business that’s selling the bond. To get competitive quotes, a bond agency will work with multiple bond companies to find you the best price.
  • Bond Provider: This is a general term used across the board. Depending on the context, it can refer to the bond company, the bond agency, or any business that deals in bonds.

Once you start receiving quotes, or when you have the bond contract to sign, you may notice these terms being used in specific ways.

What to Look For When Choosing a Bonding Provider

Before spending any money, there are several important things to consider when choosing a surety bond provider:

  • Verify that the company is licensed to provide bonds.
  • Confirm they’re authorized to do business in your state.
  • Make sure the company can provide the specific type of bond you need.
  • Check out the bond coverage amounts they offer.
  • Ask if they will provide a free quote in writing.

Specific elements of your bond agreement will vary based on state laws for the services you offer or the type of business you operate. No matter what type of surety bond you’re looking for, it’s up to you, the bond principal, to make sure you’re getting the right policy and coverage amount required by your industry’s regulatory authority.

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Make Sure Your Bond Provider is Reputable

Reputation is an important consideration in business, especially when it comes to things like insurance and bonds. Once you’ve established that a surety provider is properly licensed and offers the right type of bond for your needs, you’ll want to make sure they’re reputable. Here are a few tips to help you compare bonding companies.

  1. Check Company History
    It’s best to work with a bond provider that’s been in business for a long time. Knowing that the provider you choose will likely be around for the duration of your bond term can provide peace of mind.
  2. Find Experts in Your Industry
    Look for a surety bond business with expertise in your industry and a team of experienced specialists who can address your specific needs. Depending on your industry and location, getting bonded or renewing an existing bond can be complicated, especially when you may not have the best credit score.
  3. Read Third-Party Reviews
    Conduct some preliminary research online. Most customers now turn to Yelp or Google to share their reviews about the businesses they frequent. Websites like the Better Business Bureau can be helpful as well. Keep in mind that the BBB’s rating system is separate from the customer ratings that appear on the site.

Next Step: Comparing Bond Quotes

Once you’ve selected a few reputable surety bond providers, it’s time to request quotes and compare costs.

Let’s take a look at the primary factors that impact the price of your bond.

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