What you'll pay for your surety bond can vary due to a number of factors, the primary one being the bond form obligation's perceived risk.
If the obligation guaranteed by your bond form is considered low risk, pricing can be provided without a credit report review or any other underwriting. In these instances all clients pay the same premium for their bond. Since pricing is fixed in these situations, premiums are already as low as possible, so there's no way to lower the cost.
If the obligation guaranteed by your bond form is considered risky due to the likelihood of potential claims, some degree of underwriting will be required. Underwritten bonds all start with a simple review of the credit report for the applicant (or applicants if a business entity has multiple legal owners).
When underwriting bond applications to determine pricing for risky bonds, underwriters consider the likelihood that a claim could occur and the ability of the applicant(s) to repay the surety for any potential losses. This is why applicants with lower credit scores and financial issues typically pay higher rates on their surety bond premiums.
To ensure you receive the lowest possible pricing for an underwritten bond, all applicants should do everything in their power to make sure their credit score, personal financials, and any applicable business financials are all in good shape.
Most of the time pricing for underwritten bonds can be provided based on a simple credit report review. If your credit score is low, your financial credentials are lacking, and/or your premium is higher than you'd like, there are a few things you can do to strengthen your application and possibly lower your surety bond cost.
- Provide a detailed, verifiable personal financial statement for the applicant(s)
- Provide a resume or other documentation proving professional experience in the industry
- Add a qualified cosigner with stronger financial credentials to the account. This individual must be willing to indemnify the bond, which means they'd agree to guarantee the fulfillment of the bond's obligation.
- For existing companies, provide full business financials
The SuretyBonds.com team works with a number of markets and underwriters to find the best fit for every client. This allows us to offer the lowest available premium no matter the applicant's financial situation.
If you have questions about surety bond underwriting and pricing or would like to submit a new request, call 1 (800) 308-4358 or email firstname.lastname@example.org, and one of our friendly representatives will be happy to help.