“We’ve targeted tight turnaround times from submission to approval using Old Republic Surety’s (ORS) FastBond process — the faster, the better,” says Todd Taylor, CPCU, AFSB.
As an ORS Bond Manager, Taylor has seen the favorable impact of FastBond, which has been available for more than 10 years. “We’ve managed to simplify the bonding process for agents by offering limits up to $1 million based on credit only,” he says. “And because there’s no need for additional financial information and no CPA required, that saves tremendous time and hassle. Within the Fast Bond program, Old Republic Surety will consider non-residential completion bonds up to $250,000 in bond penalty on credit-based underwriting. Higher limits can be considered with additional underwriting information.”
What if a client does require more? Taylor explains that they can still use FastBond to secure up to $2 million single or aggregate by adding current corporation and personal financial statements to their application — still no CPA involvement necessary.
Taylor notes a recent uptick in FastBond activity as well. “We have a history of writing accounts using common sense underwriting, and Old Republic Surety is proud of our partnership with agents who write accounts that may be smaller or simply have few or very infrequent bond needs. These are the kinds of accounts that are a real plus for so many agents. Although they may not qualify for our contract side, they represent a real mainstay of the construction industry.”
Keeping agents competitive
To stay ahead of the curve and maintain a leadership position in these smaller account markets, Old Republic Surety requests agent feedback and monitors industry conditions. “As in other sectors, construction costs have risen across the board, making the same risk come in at a much higher price than it did just a few years ago,” Taylor says. “We’ve continued to adjust our limits as needed to keep pace with those changes, which is why we recently increased limits from $750,000 to $1 million based on credit. The FastBond application is as simple as before, but higher limits keep our agents competitive, and they can qualify larger accounts with less need for underwriting. Best of all, even at these higher limits, the quick turnaround is still possible, which can be crucial for winning a bid.”
As Taylor notes, contractors often postpone tackling bond issues until the end of a bid process, and it’s not unusual for them to wait in an agent’s office for bond approvals. “Bid time pressure can be intense,” he says. “Our quick turnaround alleviates some of this stress.”
While many agents are already comfortable with the FastBond application process, the ORS team is ready to jump in and provide guidance for any agents who are just getting started in bonds or who might need help with the first few applications. “We can speed up the learning curve and double-check their work until they’re comfortable doing an application on their own,” Taylor says, “But because the form is so straightforward and the bond is primarily credit-based or only requires existing financial statements for higher amounts, most agents become adept quite quickly.” He adds that Old Republic Surety can also provide a bond-ability or pre-qualification letter if that’s a requirement before any formal bonding. “We’re always happy to verify that a subcontractor can qualify for a bond if that’s all they need in order to submit a bid,” he says.
FastBond can also be a helpful stepping-stone for agents who want to help their clients transition into larger projects. “Few clients are able to jump to a standard bond program overnight, and some just don’t want to make the additional required investments, like CPA involvement,” Taylor says. “With FastBond, the higher limits help agents keep more of their growing accounts until they’re ready to graduate to our contract side.”
FastBond advantages
While Taylor considers the higher limits, quick turnaround and easy application process among FastBond’s primary benefits, he also highlights their bond availability in all 50 states and their consideration of all construction trades. “This is a solution that’s ideal for shorter duration projects in that sweet spot of $1 million to $2 million, but we have plenty of flexibility to discuss variations,” he says. “Even when a job is projected to be slightly higher, we want agents to call us; we’re always willing to discuss the underwriting specifics and dig into the details of a project to reach an approval. Old Republic Surety has always based our bond approvals on more than just the spreadsheet numbers.”
Taylor adds that the company will continue to evaluate and adjust FastBond as needed. One recent improvement is the addition of secure DocuSign electronic signatures for applications. Other workflow features are in constant review.
“Offering a more streamlined bonding process for smaller exposures is one of the best ways to expand opportunities for our agents,” he says. “And Old Republic has really supported our efforts to improve small account servicing. After all, more bonds mean more growth, and just because a bond may be considered small by industry standards or a client has an infrequent need, they’re still a necessity. We’re here to make getting them as easy as possible for our agents.”
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