Simplifying Smaller Bid Efficiency and Cost Bonds for Brokers and Contractors

This submit is a part of a sequence sponsored by Previous Republic Surety.

“We’ve focused tight turnaround occasions from submission to approval utilizing Previous Republic Surety’s (ORS) FastBond course of — the sooner, the higher,” says Todd Taylor, CPCU, AFSB.

As an ORS Bond Supervisor, Taylor has seen the favorable influence of FastBond, which has been accessible for greater than 10 years. “We’ve managed to simplifythe bonding course of for brokers by providing limits as much as $1 million primarily based on credit score solely,” he says. “And since there’s no want for extra monetary data and no CPA required, that saves great time and problem. Inside the Quick Bond program, Previous Republic Surety will contemplate non-residential completion bonds as much as $250,000 in bond penalty on credit-based underwriting. Larger limits could be thought-about with extra underwriting data.”

What if a shopper does require extra? Taylor explains that they will nonetheless use FastBond to safe as much as $2 million single or combination by including present company and private monetary statements to their utility — nonetheless no CPA involvement needed.

Taylor notes a latest uptick in FastBond exercise as effectively. “We’ve a historical past of writing accounts utilizing frequent sense underwriting, and Previous Republic Surety is happy with our partnership with brokers who write accounts which may be smaller or just have few or very rare bond wants. These are the sorts of accounts which can be an actual plus for therefore many brokers. Though they might not qualify for our contract aspect, they symbolize an actual mainstay of the development business.”

Retaining brokers aggressive

To remain forward of the curve and preserve a management place in these smaller account markets, Previous Republic Surety requests agent suggestions and screens business situations. “As in different sectors, development prices have risen throughout the board, making the identical danger are available at a a lot larger worth than it did just some years in the past,” Taylor says. “We’ve continued to regulate our limits as wanted to maintain tempo with these adjustments, which is why we not too long ago elevated limits from $750,000 to $1 million primarily based on credit score. The FastBond utility is so simple as earlier than, however larger limits preserve our brokers aggressive, and so they can qualify bigger accounts with much less want for underwriting. Better of all, even at these larger limits, the short turnaround continues to be attainable, which could be essential for successful a bid.”

As Taylor notes, contractors typically postpone tackling bond points till the top of a bid course of, and it’s commonplace for them to attend in an agent’s workplace for bond approvals. “Bid time strain could be intense,” he says. “Our fast turnaround alleviates a few of this stress.”

Whereas many brokers are already comfy with the FastBond utility course of, the ORS group is able to soar in and supply steering for any brokers who’re simply getting began in bonds or who would possibly need assistance with the primary few purposes. “We are able to velocity up the training curve and double-check their work till they’re comfy doing an utility on their very own,” Taylor says, “However as a result of the shape is so easy and the bond is primarily credit-based or solely requires current monetary statements for larger quantities, most brokers grow to be adept fairly shortly.” He provides that Previous Republic Surety can even present a bond-ability or pre-qualification letter if that’s a requirement earlier than any formal bonding. “We’re at all times comfortable to confirm {that a} subcontractor can qualify for a bond if that’s all they want to be able to submit a bid,” he says.

FastBond can be a useful stepping-stone for brokers who wish to assist their shoppers transition into bigger initiatives. “Few shoppers are in a position to soar to a typical bond program in a single day, and a few simply don’t wish to make the extra required investments, like CPA involvement,” Taylor says. “With FastBond, the upper limits assist brokers preserve extra of their rising accounts till they’re able to graduate to our contract aspect.”

FastBond benefits

Whereas Taylor considers the upper limits, fast turnaround and simple utility course of amongst FastBond’s main advantages, he additionally highlights their bond availability in all 50 states and their consideration of all development trades. “It is a resolution that’s supreme for shorter period initiatives in that candy spot of $1 million to $2 million, however we’ve got loads of flexibility to debate variations,” he says. “Even when a job is projected to be barely larger, we would like brokers to name us; we’re at all times prepared to debate the underwriting specifics and dig into the small print of a mission to succeed in an approval. Previous Republic Surety has at all times primarily based our bond approvals on extra than simply the spreadsheet numbers.”

Taylor provides that the corporate will proceed to guage and modify FastBond as wanted. One latest enchancment is the addition of safe DocuSign digital signatures for purposes. Different workflow options are in fixed evaluate.

“Providing a extra streamlined bonding course of for smaller exposures is among the finest methods to increase alternatives for our brokers,” he says. “And Previous Republic has actually supported our efforts to enhance small account servicing. In any case, extra bonds imply extra development, and simply because a bond could also be thought-about small by business requirements or a shopper has an rare want, they’re nonetheless a necessity. We’re right here to make getting them as straightforward as attainable for our brokers.”

For extra information from Previous Republic Surety, please go to https://www.orsurety.com/blog.

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