As a general rule, surety bond renewal is simpler than the initial application. But there are still some things to know that can help ensure the renewal process is smooth and painless for your customer.
Begin the Renewal Process Early
Time flies. And so too can the term for a surety bond, which is typically one year. It’s critical that you stay vigilant and get out ahead of—way ahead of—those fast-arriving renewal dates because a lapse in bond coverage can have big repercussions.
For example, license and permit bonds are closely tied to the issuance of the licenses and permits themselves. If a license or permit bond is allowed to expire, the termination of the principal’s license or permit will follow shortly thereafter. In the period it takes to get everything back on track, your customer could lose out on business.
We recommend beginning the bond renewal process well in advance of expiration: 60-90 days if you can swing it. This is to ensure that not only do you give yourself and your customer enough time to work through the renewal process, but also the provider and obligee. It’s not uncommon for these parties to be backlogged due to renewal congestion or shortened holiday hours.
Help Your Customer Save Money at Renewal
Underwriters take into account a number of risk factors when determining premium rates for surety bonds. Among these factors is the risk that your customer presents in terms of their ability to reimburse the surety if a claim is made. In fact, it’s often the factor that has the most sway.
So if your customer’s premium rate was high last year, it’s important to remind them that improvements in credit scores or overall financial stability will likely reduce their bond renewal rate. Not all bond types require an underwriter’s review of your customer’s finances, but for those that do, the ability to demonstrate improvements can result in significant savings.
Know What Documentation Is Required
Some surety bonds are continuous and require no new documentation upon renewal; others require a continuation certificate. Still others, especially those with fixed term end dates, require that an entirely new bond be issued.
Make it your business to know exactly what bond renewal documentation is required so that your customer can attend to it in a timely fashion—and avoid any last-minute scrambles.
The Bond Exchange Makes Renewals Easy!
Never miss a customer’s bond renewal deadline. We quote renewals 90 days prior to expiration and make them available for purchase online. You can also utilize our direct bill renewal process and let us bill your customer automatically with professional invoices that display your agency name and logo. We’ll provide you with all required renewal forms so your customer stays compliant with the obligee.
The Bond Exchange has 40 years of experience providing insurance agents with the service and expertise necessary to satisfy the surety bond requirements of their customers. Leverage our experience—and free online platform—to streamline the surety bond process. Questions? Call us at (800) 438-1162!