Not an ‘Ugly’ 4-Letter Phrase

This submit is a part of a sequence sponsored by Outdated Republic Surety.

Surety bonds have garnered an unlucky repute of being “ugly” or “uncomfortable” for unbiased insurance coverage brokers for a lot of causes.

Not like a standard insurance coverage contract, which is a two-party settlement between an insurance coverage supplier and a policyholder, a surety bond includes three events: the principal, the obligee and the surety. The principal ensures cost or efficiency of its bonded obligation to the obligee and if the principal defaults, the surety will make good on the duty to the obligee (after which search reimbursement from the principal).

In some ways, bonds are extra akin to strains of economic credit score that banks prolong to purchasers than they’re to conventional insurance coverage insurance policies. For that motive, some brokers have dismissed them as too advanced.

However with the fitting surety accomplice, something is feasible. At Outdated Republic Surety, we’re there to assist brokers by means of each step of the surety transaction, from bond choice to issuance with assured training, communication and hand-holding alongside the best way.

The sweetness in bonds

Impartial brokers might miss out on prime enterprise alternatives in the event that they fail to spot the wonder in surety bonds.

Brokers who can’t supply bonds danger dropping purchasers to opponents. In the meantime, those who make the leap into surety can supply extra value-added providers to present and potential purchasers, which may reap large rewards in shopper attraction, satisfaction and retention.

The expansion alternatives are important. There are literally thousands of surety bonds out there to assist contractors in an enormous vary of professions guarantee efficiency of an obligation and compliance with authorized necessities.

For some brokers, the sheer scope of the bond market is a catch-22 as a result of there are virtually too many choices to contemplate. However teaming up with an skilled within the house can flip that probably overwhelming pool of merchandise into focused enterprise alternatives.

Additionally it is value remembering that many surety bonds are fast and straightforward to underwrite. Brokers can typically fulfill their purchasers’ wants the identical day and with a number of clicks of a button by means of immediate-issue bond packages.

And the bonds themselves are additionally sticky. They usually final all through a contract or challenge, or the protection is steady till canceled. That is not like conventional insurance coverage insurance policies that might get shopped round on an annual foundation.

Lastly, there’s magnificence to behold in surety bond commissions, which may vary from 20% to 35% or larger in a smooth market. That’s a pay fee that shines compared to the ten% to fifteen% fee brokers usually earn on property and casualty insurance coverage premiums.

Partnership is vital

There’s rather a lot to study in the case of providing and issuing surety bonds, however the positives for unbiased brokers far outweigh any challenges related to breaking into the bond enterprise.

Brokers who contemplate “bond” to be an unsightly four-letter phrase in all probability lack the help they want to achieve surety. However with a devoted surety accomplice like Outdated Republic Surety, they’ll see the wonder in bonds earlier than lengthy.

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