According to a recent article in Independent Agent magazine, now is a good time for agents to be in the surety bond business. With a significant amount of capital available, agents can take advantage of the surety market’s expanded capacity.
It begs the question of what independent agents should look for in a surety.
One important consideration is the surety’s financial strength. “It’s a good practice to partner with sureties that match or exceed financial requirements and to avoid the possibility of bonds being rejected due to the financial strength of the surety providing the bonds,” says Beth Harbeck, Old Republic Surety regional vice president - commercial, who’s quoted in the article.
Agents should check the Treasury Department’s list of certified surety companies, known as Circular 570. Companies on the list meet Treasury regulations for acceptable sureties and reinsurers under federal law. The list provides helpful information such as contact information, underwriting limitations and the states where a company is licensed.
You can also check a surety company’s AM Best rating. Another guideline is how long the company has been in business and if it has successfully weathered economic ups and downs.
You’ll also want to choose a surety that can write both contract and commercial bonds. On the commercial side, these include license and permit, fidelity, court and miscellaneous bonds.
If you’ve shied away from placing surety bonds in the past, understand that today’s increased market capacity gives you more opportunities to partner with a surety that will work to meet your clients’ needs and grow with your business.
To find out more about Old Republic Surety’s bond products, contact a branch in your area.
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