SURETY BOND INSURANCE

 

A surety company on your behalf can issue a performance or contractual bond. Customers can demand payment against such a bond at any time causing losses to the surety company. Surety bond insurance protects surety company from such losses. This encourages your surety company in providing you with your desired bonding capacity you want to make international sales.

 

Costs of surety bond insurance depend on a number of factors like period of the guarantee and risks associated with the project. To qualify for surety bond insurance, a number of factors are evaluated like terms of the contract, financial, technical and managerial capabilities, bonding instruments, economic and political conditions and other outlooks in customer’s country.

 

You need surety bond insurance if our business depends on obtaining surety bond. For such businesses to be able to secure coverage it is necessary to be a good risk.

 

Businesses can take following measures to establish themselves as a good surety risk:

 

  1. Recognise your capabilities – Maintain discipline. Concentrate on work that can be handled by your organisation and resist temptation.

  2. Manage bank financing – Avoid maximizing your bank line of credit. Maintain good bank borrowing capacity availability.

  3. Build strong financial foundation – bonding capacity should be maximised by building business net worth and working capital.

  4. Non-essential overheads must be reduced – Make difficult choices now to achieve better future rewards.

  5. Make sure your customers pay – It is very important to collect your money from customers on time to maintain good cash flow.

  6. Maintain simple financial statements – A CPA should be appointed to prepare financial statements at least once annually.

  7. Build a team of experts – Seek advice regularly from your surety broker, banker, accountant and even lawyers.

For more information on Surety Bond Insurance, or to discuss your existing insurance policies, please call at (416) 484-4545 or email us at cover@getcreditinsurance.ca.

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