How to Get a Surety Bond. Surety bonds are common in the construction industry or whenever someone assumes fiduciary duties in a public trust capacity. If for some reason a person or company cannot fulfill their responsibilities, the surety company steps in and ensures that the work will be done. Need to apply for a surety bond? Here's how to do it.
Things You'll Need
- Surety bond agent
- Financial statements
- Credit history
- Proof of a banking relationship
- Organizational chart with resumes of key personnel
- Business plan
- Audited accounting statements
- History of completed projects
- Indemnity agreement
- Surety bond underwriter
Find an agent experienced in writing surety bonds for your industry. Most agents work in a surety bond company or are insurance agents with a sideline in issuing surety bonds.
Meet with the agent to discuss your business and your business plans. This way, he or she can get a better idea of what kind of surety coverage you need and what companies can best suit your unique situation.
Assist the agent in passing on information about your company to the surety bond underwriter. The underwriter will examine the documentation submitted, like financial statements, your history of paying bills on time and your banking relationship, to make a judgment as to whether or not you can complete the project they will be bonding.
Pre-qualify yourself for the surety bond by showing that your company is a well-run organization. Show the surety bond company an organizational chart with resumes of key personnel, your business plan, audited accounting statements and a history of completed projects, among other documentation.
Sign the indemnity agreement, if required by the surety company. This agreement guarantees reimbursement to the surety company for any losses they incur because of the contractor's performance. Depending on the situation, the indemnity may be corporate or personal.
Maintain your relationship with your surety bond company. This will streamline the process in the future and allow you to quickly bid for projects that require bonding. In addition, the surety company will be able to easily refer you to other professionals that you may need to run your business smoothly, like accountants, bankers or lawyers.