Are you getting ready to open a new Canadian business? Well, there is no denying that you are picking a good time because the market is more than ripe for the picking. Despite this, you have probably had many individuals tell you that you need to get a surety bond to conduct business in certain Canadian provinces. The truth of the matter is that these individuals don’t really have any idea what a surety bond is or what it is really used for. They don’t know where to get one or even how much they will cost. No one can dispute the fact that the surety bond market is confusing, but this is where our company, ProfessionalsCoverage, comes into play. We are not only here to make the process easier for you, but we are here to expedite it.
Steps One: What Type Of Bond Do You Need And The Amount?
The first and probably the most important thing to understand is the type of surety bond that you need. Throughout your quest, you will find that there are several available. Not only this, but there are several different companies throughout Canada that offer different bonds. Along with knowing the type of bond that you need, you will also need to know the amount that you will need. Luckily, we have made this entire process easier for you.
All you have to do is visit our website and select your area. Just to give you a quick estimate, you can probably figure that your overall cost is going to be typically somewhere between one to five percent of the total bond amount. For instance, if you need a bond for a million or $10,000, your overall cost is going to be somewhere between one and five percent of either one million or $10,000.
Step Two: Get Your Information In Check
The second step to the entire process is going to be to get all your information in check. Of course, you are going to need to know the information that you need to ascertain. When applying for a surety bond in Canada this can include anything from your business name and address to your license number, and ownership information. Just keep in mind that every company out there is different and may require different information. We try to make the process as easy as possible by requiring the littlest information possible.
Step Three: Apply To Get A Free Quote
You can speak to any surety expert and they are going to tell you that getting multiple quotes is the most important part of applying for a surety bond for a construction project. This might sound strange coming from an insurance company, but getting multiple quotes really is your best option. Not only we provide quotes for free, but we are willing to provide quotes for multiple construction surety bonds such a bid bonds and performance bonds. Another great think about working with us is that we have an office located throughout Canada. This not only ensures that we are accessible, but it ensures that you are going to get the most competitive pricing possible.
Step Four: Buy And Receive Your Bond
Once again, we have done everything we possibly could to make this process easy and quick for you. And, this is why we allow our customers to purchase bonds right from our intuitive website. However, if you are having problems navigating the site or just have additional questions, you can simply pick up the phone and give us a call at our toll-free number. We have trained and qualified agents standing by ready to assist your every need around the clock. Don’t hesitate because the competition won’t.
Step Five: Get Your Surety Bond Filed
Congratulations, you have made it to the last step. This might be the last step, but it is without a doubt a crucial and pertinent piece to the whole puzzle. This is especially true in Canadian provinces. Before taking on a job there are some individuals that will require you to post a surety bond before beginning the project or even before accepting your bid bond during the tender. This will be the purpose of getting the bond in the first place. Once you get the bond the whole process doesn’t even stop there.
Once the bond is acquired, you will then need to get back in touch with the individual or company to see if they require you provide a raised or digital seal on the performance bond after being awarded the job. If this is the case then you may have to do is sign the back of the bond as the principal and submit it for approval to the individual or company requiring the bond. When your bond is filed, you are done!
Understanding Surety Bonds And What They Are
Just because you now know how to apply for a surety bond it doesn’t necessarily mean that you are on your way. Don’t you need to understand what a surety bond is and why you are applying for one in the first place? Of course, you do and that is what you are about to learn. For those new to the process, a surety bond is nothing more than a contract. A contract between three parties. The three mentioned parties will include you (the principal), the surety (the insurance company), and the obligee (the individual or company requiring the bond).
Another thing that you need to know right away is that there are many different types of surety bonds. The bond required might depend on the individual or company that you are doing business with as well as the province that you are trying to get the bond in. And, this is not to even the differing requirements. For instance, in Ottawa, it is usually fairly easy to purchase a title bond. However, this isn’t the case in Alberta. In fact, in Alberta, you may have to produce additional documentation. And, this documentation will need to be reviewed by the insuring company before the bond can be legally issued.
To make things even more confusing, each industry is different. For instance, cleaning company bonds are usually just issued outright, whereas bonds for freight brokers will be required to go through an additional underwriting process. This will also help determine the overall price of the bond. This is pretty much how the business end of things work. You also have to understand that bonds are sometimes issued when a loved one dies. These are usually referred to as probate bonds and they have to do with the proving of a deceased person’s will as well as the distribution of their assets.
Bonded: What Does It Mean?
As a Canadian consumer, you need to know the definition of the term “bonded”. Most consumers are familiar with the term but do not fully understand its meaning. Companies that are “bonded” have undergone a full background check and deemed “trustworthy” by an underwriting service. The process utilized for bonding purposes is very complex and in-depth.
Companies, contractors, and sub-contractors seeking to obtain a surety bond must meet or exceed the requirements and regulations set forth by the Canadian government. Underwriters are required to follow government regulations to determine if their clients are worthy to be insured. The underwriting process involves criminal background and credit history checks. The applicant is required to provide the underwriter with all the data required to verify their credit, business, and criminal statuses.
The processes utilized in the underwriting process may vary from one type of bond to another. If you are seeking to be bonded, you should contact your underwriter to determine what process is utilized before completing the bond application. There are times, while very rare when a credit check is not required. The amount of the bond can also make a difference.
Why Are Surety Bonds Important?
This is a common question that we hear at ProfessionalsCoverage. In fact, we almost hear this question on a daily basis. We are glad that people are asking this question because it means that they are paying attention and they care about where their money is going. Well, we are more than glad to lay it all out for you. To start our, business surety bonds are important because your clientele will require them. This is especially true for those individuals in the commercial construction industry. In a lot of Canadian provinces, it is mandated by law for public works projects to have these bonds. When it comes to residential projects it is really up to the owner to decide if they want a surety bond or not.
Whatever the situation is, the surety bond will not only protect the business you are doing the work for, but they will protect you and your company as well. There is no denying that a lot can go wrong on a construction site. These surety bonds will not only ensure that the construction company is safe from the contractors, but they can even provide financial retribution in the event that the contractor causes the construction company financial losses. The overall financial risk is shifted from the owner of the project to the surety owner.
Canadian Surety Bond News 2019
Some Canadian underwriters are concerned about the extremely high number of surety bond claims. Experts have contributed the increase of bond claims on the cutbacks in the Canadian gas and oil industries. The increase in surety bond claims is more prominent in the western part of the country, according to local insurers.
Bond claims have also increased in other markets as well. These markets include Alberta, Manitoba, and Saskatchewan. The increase in these markets has been contributed to a decline in the construction industry.
American oil prices have dropped significantly in the past few years. While it is unclear whether or not surety bond claims have increased in the country, oil prices are at an all-time low. According to a report released by Bloomberg, a single barrel of oil cost $93 in 2014. Today, the same barrel of oil has dropped to $56.46.
From 2014 to 2018, gas and oil extraction spending has been slashed in half, according to an article posted on the Calgary Business website in early 2019.
Surety bonds are more commonly utilized in the Canadian construction industry than any other industry. Bonds utilized in the construction industry protect businesses, organizations, and government entities in the event a contractor fails to fulfill the contract signed by all involved parties. For example, a contractor does not complete a construction project by the deadline noted in the contract, the client has the right to file a claim against the surety bond. Once the claim is filed, the underwriter will initiate an investigation into the matter. If it is determined that the claim is legitimate, the underwriter will find in the client’s favor.
Still Have Questions?
Do you still have questions? This is completely understandable. It would be nearly impossible to learn everything that you need to know about the industry after just reading this little informational article. We completely understand this and that is why we are more than willing to do all the heavy lifting for you. We here at ProfessionalsCoverage make it a priority to handle everything from the start to the finish with you. We will not just do the entire process for you, but we will ensure that you are involved in every step throughout the whole process. Our thought process is – the more you know about the bond process, the more comfortable you are going to be allowing us to complete the bond processing on your behalf.
In the event that you have more questions or just want to more about the entire process all you have to do is puck up the phone and give us a call. Not only this, but you can also visit our site and drop us an e-mail or submit a question through our forum. We usually have techs standing by ready to assist, but the best and quickest way to get in touch with us is via phone call.
If you would like to learn more or speak to a broker or agent regarding your bonding needs, you can contact us or request a quote.