As a customer, the first thing comes on mind when purchasing goods; is about the cost of the product.
Hence the product's cost is an important factor.
This cost factor applies on surety bonds also.
Apart from this cost factor, there are several things that you need to think of when purchasing a surety bond.
It includes the financial strength, service of the agency who is writing the bond, requirements for renewal and finally the potential for additional surety credit.
A service agency with a very poor customer care is always a big problem for customers.
There are several people who complaint about the customer service.
Hence make sure you bond provider has a friendly and excellent customer care service.
Bond companies give letter graders to specify their surety financial strength.
If you look at the market of any contract bond, look at the specific letter grade which the company provides.
In case if you looking for any commercial or contract bonds, it's always good to see if the surety is on the list of Federal Treasury.
The T List shows that all the bond companies are acceptable to the Federal government.
Generally in the first year, the bond's premium is fully earned; this means that there will be no refund if you cancel the bond after the issuance.
It is important to check if the bond is acceptable to the obligee before the payment being sent.
When it comes to renewal requirements, the bond renewals keep differing from one company to the other.
Some companies will demand for updates on the account, but this is not limited to the business financial statements, credit reports or for the personal financial statements.
If the necessary updates, doesn't meet the bond companies' guidelines, then the bond will be simply canceled, even if you are with the surety bond for many years.
Some sureties may automatically renew the bond without reviewing any information.
Generally the bond companies' underwriting guidelines are quite similar.
Some conservative bond companies have low rates because of their very strict underwriting and lower claim rates.
Sadly due to the downfall of conservative bond company, there are lower limits to the bonding capacity for each account than the liberal surety.
With anything you purchase, there are lots to the bond than its cost.
Its is advisable, that you don't purchase a bond just because of its cheaper price, because later you will end up having problems; so it is always better to discuss with your concerned bond producer.