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Six Factors to Consider When Selecting a Surety Bond Provider

Six Factors to Consider When Selecting a Surety Bond Provider

Did you know that construction spending will reach $12.42 trillion globally by 2022? In Canada alone, construction output is expected to grow by almost 30% over the next five years. With construction activity booming worldwide, construction contractors need to be prepared for the challenges and opportunities this growth will bring.

One of the most important decisions construction contractors will make is selecting a surety bond provider. To get a construction performance bond, construction contractors must select a surety bond provider. However, it can be challenging to know which one to choose with so many different surety bond providers.

Here are six vital factors to consider when selecting a reputable bond provider:

  1. Financial Stability

When looking for a surety bond provider, you should consider the financial strength and stability of the company. The last thing you want is to work with a company that isn’t financially stable and might not be able to pay out a claim.

The best way to assess a company’s financial stability is to look at its credit rating. You can also seek references from other clients who have used the provider’s services in the past.

  1. Experience

Did you know there are around 500 surety bond providers in Canada? It is crucial to choose a provider with experience with so many options. You don’t want a provider who is just starting and doesn’t have the experience to back up their services.

When looking at a provider’s experience, look at how long they have been in business. It is also essential to consider their team of professionals. You want to make sure that the team is experienced and can provide you with the support you need. 

  1. Customer Service

No matter how good a surety company is, you should look elsewhere if they don’t have good customer service. Thorough and responsive customer service is essential when choosing a surety bond provider.

As a client, you should feel like a priority to the company. If you don’t feel like the customer service is up to par, it is probably best to look elsewhere. Make sure to ask around and see what other people’s experiences have been with the company’s customer service you are considering.

  1. Claim Process

Construction performance bond claims can be complex and time-consuming. That is why it is important to choose a provider with a claim process that is straightforward to understand.

It is crucial to do your research and read reviews before making a final decision. To get an idea of the company’s claim process, you can ask for references from other construction contractors.

  1. Pricing

When you sign up with a surety provider company, you must verify that the company is affordable. When it all comes to cost, there are a important few things to consider. For starters, make sure that the premium is not too high.

It is also essential to consider the payment options. Some companies need you to pay the premium upfront, while others allow you to finance it. So, you must compare the different options and choose the best plan for you.

  1. Coverage

Ask your potential surety company what type of coverage they offer. You want to make sure that the coverage is adequate for your needs. For example, if you are working on a large project, you will need more coverage than working on a smaller project.

You also want to ensure that the company offers coverage for the project you are working on. Make sure to right ask about this before all making your final right decision. For example, if you are working on a government project, you will need to ensure that the company offers coverage for projects of that nature.

All in all, there are many factors to consider when choosing a surety bond provider. By taking the time to do your research, you can be sure that you select the best possible option for your business.

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