As a contractor working in the construction industry, you’ll likely need to secure a surety bond at one point in time. These are commonly required before entering multi-million-dollar projects as a means of guaranteeing timely performance.
A surety bond broker is integral to this process, but, as with anything, all brokers are not made equal. Choosing the right one will ensure you get what you need at a fair price—but choosing the wrong one can have consequences.
In this article, we’ll teach you how to select a broker by assessing them based on a variety of different criteria. We’ll talk about licensing, reputation, and their ability to support you on a variety of different needs across all stages of the process.
Ready? Let’s get into it!
1. Proper Licensing and Adequate Experience
First and foremost, you need to make sure any surety bond broker you’re considering is licensed and legally allowed to work in Canada. Be aware that surety broker licensing requirements can and do vary by province/territory.
Assuming they’re licensed, you should then determine if they have an adequate amount of experience in your industry. This will allow them to understand the specific risks and requirements of your business both financially and operationally, meaning they’ll be able to help you secure the right bond at the most competitive rate.
Surety bonding is not something just anyone can practice. It’s incredibly important that you put your trust in someone who has the right credentials, as you otherwise risk putting yourself and your business in legal and financial jeopardy!
2. Access to Multiple Surety Companies
It’s important to understand that a surety broker does not sell you surety bonds; they act as the intermediary who connects you with the company that does. As such, you want to choose a broker that will give you plenty of options!
No matter the surety bond type you’re seeking—whether it's a payment bond, permit bond, or performance bond—the broker you choose should be able to shop around and find you the best deal from their network of connections. If they don’t have long-standing relationships with several companies, your options will be severely limited.
While we will discuss reputation more in the next point, the surety broker having connections is also a good sign as far as their credibility goes. It’s unlikely that several different companies would work with them if they did not deliver on their services.
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3. Positive Reputation Backed by Real Feedback
Another factor you need to consider is the surety bond broker’s reputation within the surety industry. Specifically, you should be looking for proof that they have positive relationships with their previous clients and are who they say they are!
A proper surety broker should have a track record of providing high-quality customer service and bonds at the best possible rate. They should demonstrate a strong commitment to helping their clients succeed in their construction projects.
Whether you find your broker through referrals or by doing your own research, make sure you can confirm their identity and reputation. Look for customer feedback from online platforms or other clients who have worked with the broker, or reach out to your colleagues and industry associations if they have brokers they’d like to recommend.
4. Quick and Responsive Communication
In searching for the bond broker that’s right for you, it’s important to remember how important this legal agreement is. With that in mind, you should prioritize finding someone who practices quick and responsive communication!
For example, in instances involving a bid bond, slow communication on their end could absolutely lead to losing out on a project. Your broker should be helping you, not becoming the reason why you miss out on valuable work opportunities.
Always look for a broker who provides excellent customer service and can ensure your business’s needs are met. Evaluate the time it takes for them to respond to requests or concerns, and observe if they offer help when you need it.
5. Financial Stability
The cost of a surety bond isn’t just something for you to worry about—it’s also something that applies to the surety bond broker. If they aren’t financially stable, they won’t be able to provide you or surety companies with the guarantees they’re seeking.
First and foremost, a surety broker who isn’t financially stable won’t be able to handle accounts with larger bonding needs. This is a problem if you run a larger business or intend to secure bonds for larger projects. Their market access will also be limited, which ties back to the second point about being able to provide you with options.
Additionally, financial instability will make it challenging for the surety bond broker to facilitate should a claim be made against the bond. They’ll likely lack the resources needed to move things along and reach a resolution.
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Make KASE Insurance Your Surety Bond Broker
So, wondering how to select a surety broker? You should be looking for someone who is licensed, experienced, and capable of getting you what you need—all of which are boxes checked by the team of professionals working at KASE Insurance.
We are the premier insurance brokerage firm in Ontario, with years of experience helping others under our belt. Our services have been lauded by industry experts for our innovative and customer-centric approach. No matter what kinds of surety bonds you’re looking for, we’ll find you exactly what you need.
Get in touch with us today for a quick quote or to learn more about our surety bond and insurance solutions services.