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The Surety Bond Agent
A surety bond agent is an insurance agent that has a special expertise in bonds. The bond agent will gather the necessary information to propose your application to those bonding companies that best fit your size, expertise and financial situation. The bond agent may make recommendations to improve your chances of approval. The bond agent generally receives compensation for his or her efforts when a bond is approved or "written". This takes the form of a percentage commission paid by the bonding company based on the bond premium amount. Agents may request an upfront application fee due to the large amount of time and effort involved in the application process. The surety bonding business is hazardous. Francis Bacon is reported to have said that "Going surety for a neighbor is like putting on iron to swim". Still, the need for bonding grows daily and also the need for knowledgeable bond agents. Since agents are the link between the surety and the public, only licensed and contracted insurance agents can sell surety bonds. Licensing individual agents helps keep unscrupulous and incompetent people from doing business on behalf of a surety. Agents are granted a Power of Attorney which authorizes the agent to act on behalf of the surety- literally putting the surety company in the agent’s office. The agent however takes none of the risk of a bond default and receives compensation in the form of a commission. This commission is a percentage of the bond premium (cost of bond). The agent usually represents many surety companies. He has a feel for the historical and current surety market and the underwriting attitudes of the sureties represented. Surety underwriters and agents establish long term relationships which hopefully result in trust and confidence. This relationship helps the bond buying public in that when a bond applicant submits information to a seasoned and knowledgeable bond agent the applicant will receive serious consideration from the underwriter. The underwriter presumes that any application coming from the agent has been screened and does not represent an unreasonable request. Even though the agent may be very reputable and competent there is no guarantee the application will be approved for bonding. The bond will be granted only if the surety underwriter thinks the applicant is credit worthy and capable of performing the work or task to be bonded. Unlike insurance it is not necessary to create a need or sell surety bonds. The need for the bond has often been created either by law or by the nature of the business needing a bond. For most bonds service and availability are key issues when looking for bonds. How do you find a good bond agency or agent? A good place to start is the National Association of Surety Bond Producers (www.nasbp.org). This is the agent association whose members write most of the surety bonds in North America. Surety Advisors, LLC, (www.suretybondservices.com) a Houston, Texas bonding agency is a member. The owner, J.Mark Strange has been a licensed bond agent since 1977. He and his staff of bond agents have the experience and connections to write most bonds whether contract bonds, court bonds, probate bonds, fidelity bonds, license bonds or permit bonds. |
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IMPORTANT NOTE: While we specialize in Surety Bonds, this Website provides only a simplified description of bonds and is not a statement of contract. Wording may not apply in all states. For complete details of bonds and conditions, be sure to read the bond, including all endorsements, or riders, if applicable. Bonds CANNOT be bound, amended, or altered by leaving a message on, or relying upon, information in this Website or through E-Mail.
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