Wednesday, December 31, 2014

What To Consider When Choosing A Surety Bond In Los Angeles

By Stacey Burt

The decision to establish a surety bonding relationship is a wise one. It can lead to more projects and eventually propel your company to the next level of growth. When shopping around for a surety bond in Los Angeles, you will be amazed with the large numbers of service providers in the market. To find the right company, it will hence be necessary to conduct a research. The following are factors you need to consider in your search.

Finding prospective bonding companies is probably the first thing you will do. This should not be a difficult task considering their numbers in the market today. Consider asking peers in the industry to recommend companies they trust and approve. Another possible approach is searching online. There are many providers online who can even effectively give you a quote within a very short time.

Licensing is a mandatory requirement for these service providers. You want to know that you are dealing with a legitimate agency that has been mandated by both an insurance company and the state to provide bonding solutions. The treasury has a listing of approved bonding companies. You can then consider checking if the company you are thinking of is on this list.

All bonding agencies are not created equal. An agency that has established itself in the market will have access to a wide variety of sureties and can also negotiate flexible underwriting. This will provide you with larger bond limits, lower rates and a higher likelihood of approval. It is hence very important that you check how established the agency is in the industry.

The best bonding provider is one who has in depth knowledge of this industry as it is greatly diverse compared to standard insurance providers. In fact, insurance brokers have a limit on the amount of bonds they can underwrite. You may want to know how many years they have been in the industry providing similar products.

As a contractor, you may want to know how long the company has been in the business. There are different types of bonding hence the need of finding one that will be suitable for your project. An experienced agency will know what is required and take the shortest time possible in underwriting a bond.

These companies charge a premium on their products. However, it is a statutory requirement that bonding agencies publish their rates and premiums so you know how much it will cost you to get their product. If you realize that these rates are not published, consider contacting the state insurance office to check why that company is not complying with set regulations. Comparing rates of at least 3 companies will help you to know which one charges reasonably.

The process of finding the right bonding company can be stressful. If you know of peers in business who have successfully obtained a similar product using an agency in your locality, ask them to provide recommendations. Irrespective of who provides a recommendation, educate yourself on the basics of bonding so you can make an informed choice.

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