How To Keep Your Surety Bond In Good Standing

Lets Start

If you’ve ever been forced to acquire a surety bond, you’ll realize that the process is a little bit stressful. Once you’ve become more familiar with it, the stress will diminish, but can still be a daunting task. Once you’ve acquired your surety bond, you’ll want to make sure that you keep it in good standing, so you won’t have to repeat the same steps again. Below, you’ll learn precisely how to keep your bond in good standing and valid.

Renewal

When it comes down to it, your surety bond isn’t going to last forever. Although it will depend on the specifics of your contract, the mass majority of bonds will expire after a year. With this in mind, you’ll want to put in a substantial amount of effort putting measures in place to ensure you do not forget your renewal date. Be sure to mark the date down on your physical or digital calendar!

Obeying The Law

It probably already goes without saying, but if want to keep your surety bond in good standing you are going to have to adhere to all the Canadian standards and laws, which govern your profession. In the event that you do not follow these guidelines, there is a good chance that you will not only loose your bond, but also you can even loose your license. This pretty much means that you could loose you whole business altogether. If you are caught breaking the law, you will lose your bond and the refund will be forfeited! Suffice to say, you should behave and do your best to abide by the Canadian laws and regulations.

Avoiding Claims, If Possible

While, it is nearly impossible to avoid all surety claims, there are ways to keep them to a minimum. It is a fact that 25-40% of the claims filed by clients on surety bonds is erroneous and holds no merit. Of course, this is not the case, because you still have the other 60-75%. One of the best ways to avoid a claim, being filed against your surety company is completing projects in a timely manner.

If at any time, you feel that the contract is reaching a compromising position, you should immediately contact the client. There is nothing that will make the client more upset than not meeting the deadline.

Deliver Satisfaction

The biggest problem, which often leads to bond cancellation, is failing to perform in a satisfactory manner. With this in mind, you should always do your best to serve your clients in a worthwhile manner. If you’re able to do this, you will be able to prevent claims and will not have to worry about expenses related to them. Also, be sure you remain communicative and keep the client aware every step of the way.

Overall

Remember that building a solid relationship with your surety provider is best. If you’re able to find a good provider, you’ll want to maintain the relationship, so they don’t drop you prematurely. In order to do this, you should follow the law, serve your clients in a satisfactory manner, and renew your bond, before it expires.

Simple Strategies For Auto Dealers Who Wish To Avoid Surety Bond Claims

Auto dealership Surety Bonding Quotes in Canada

Most Canadian provinces require auto dealers to post a dealer bond. This involves selling, leasing, and trading of new and used vehicles. If you are amid planning a dealership startup, you will need to contact the appropriate government entity. If you sell 5 vehicles or more a year, you are classified a dealer in Canada, but this does not mean that you will not need a dealer license and bond, if you commence to sell less. Below, you will discover a few simple strategies to avoid surety bond claims.

Claim Damages

Bonded companies are always going to be at risk of having a claim filed against their bond. Not only are these claims devastating to your company, but if the claim is validated, you will find it nearly impossible to conduct further business. The bond company will pay the complainant the full amount of the bond and you will be forced to repay the surety Bond Company. This will be a devastating monetary loss, plus your reputation will be ruined. In many cases, the business owner will find it nearly impossible to get approved for another bond.

Fight The Claim

It is a fact that many claims filed against surety bonds are illegitimate, but this does not make them any less stressing. Nine times out of ten, the complaint will revolve around timing, but this is not always the case. If you, as the principal of the bond, feel that the claim is fraudulent, you can fight the claim. Provide efficient proof to the surety company and speak on your behalf. Never, just take these allegations lying down, if you are not at fault.

Communication Is Key  

At the time, the client voices a complaint against your company you should immediately open up a door of communication. Early communication is the key to preventing the problem from becoming work and if you can resolve the issue now, you could save yourself a lot of grief later on down the road. Most complainants are open to reason, so do not pass this opportunity up.

Bond Meeting

Several types of surety bonds will set up a meeting at the first admission of default. The principal, obligee, and surety claims professional will need to attend the meet. This meeting will address any problems that the contractor may be experiencing, in trying to fulfill the terms of the contract. Many times, these meetings are scheduled due to lack of funds, which can be remedied by the obligee making future payments. These joint checks will be used to fund the project, so it can be completed in a timely manner.

Dealer License

In order to be approved for a dealer license, you will need to post a surety bond first. When completing the licensure application, you will need to attach a copy of the bond and submit it along with the application to the business licensing board.

Conclusion

One of the best ways to avoid surety bond claims is to comply with the provincial and territorial statues pertaining to your dealer licensure. Of course, this will not be a guarantee protection from claims, but it will definitely be a great place to start.