- November 16, 2016
- Posted by: Surety Bond Experts
- Category: Bond Approval, Surety Bonds
There are several indicator which will raise a red flag to a surety bond producer about an applicant, and therefore delay the approval of a surety bond.
One of the most obvious ones is that a claim is already open against the business applying. This will cause a lack of confidence from the surety bond producer that the applicant will not have future claims filed against them. Open communication with the surety bond producer is the best way to remedy this.
Another indicator that a delay may occur is the business’ claims history. Have claims been filed in the past? Were they found to be valid? If there is a history of claims being filed, this may make a surety bond producer wary of issuing a surety bond to the applicant.
Have you worked with the surety bond producer before? This is related to the previous point that if a surety bond producer has been able to work with the applicant, resolve any potential issues and has confidence in the applicant, the surety bond process may proceed quicker than if an applicant has a rocky history with a surety bond producer.
Is the applicant choosing a venture or industry that is heavily competitive or entails bigger projects? If a surety bond producer feels that the applicant may not be able to complete a project or run the business, they may ask for additional information to ensure confidence in the applicant’s abilities.
Is there significant and completed paperwork, preferably prepared by a CPA (Certified Public Accountant) to give confidence to the surety bond producer to issue a surety bond to the applicant?
As with any relationship, communication, trust and confidence in the other’s ability are tantamount to success. This can be done by providing financial documents, maintaining a good business history and avoiding having claims filed against your business by running your business legally with integrity, honesty and confidence. If hurdles do occur during the application process, it is always a good idea to have a plan on how to overcome them.
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