Lets Begin with the Basics!
There are hundreds of Canadians, who are entirely unfamiliar with surety bonds. Although some of these people will never encounter a need for a bond, some will and they’ll need to quickly learn about surety bonds, before they’ll be able to do so. Initially, the procedure might seem complex and incredibly confusing. Although there are some complexities involved, obtaining a surety bond is typically straightforward and fairly quick. Below, you will learn about the general procedure of acquiring construction security bonds, so you can figure out precisely how long it’ll take to obtain the needed bond.
Many individuals and business owners are under the impression that a surety bond can be issued within days of the initial application. This is a huge misunderstanding that can lead to disappointment for those that are waiting around for a response from the surety company. The pre-qualification process is actually quite lengthy, making the timing undeterminable.
The surety works diligently to complete a full analysis of the applicant. This process is a necessity, since it is the only way to ensure the surety that the applicant will be able to meet the contractual agreement terms. The surety company is always at a huge monetary risk and by processing the surety bond application accordingly these risks can be reduced drastically.
The General Procedure
It should be known that the process of obtaining a surety bond would generally depend on the type of bond that is needed. The amount of risk associated with the construction bond may play a major factor in the difficulty of the process. For lower risk bonds, it will actually be possible to apply for and acquire the bond online. Once you’ve found a suitable surety company, you’ll find a quote form on their website. After this form has been completed and submitted, you’ll receive a quote within a short period of time. Keeping this in mind, you must meet the bond requirements and personal credit scores that make you eligable to receive the bond without any further underwriting.
If you find that the quoted price is reasonable and will easily fit into your budget, you’ll be able to go ahead and pay the initial upfront cost. From there, you’ll be able to sign the bond contract and the surety will begin working to process the bond and will eventually mail it to your physical address. Some may also give you the ability to print the bond directly from your computer. Just remember that some bonds will impose a stricter qualification process, so the duration may drag out a bit longer.
It is vital to know that there is truly no universal time frame for acquiring a construction bond. The procedure and length of the process will deviate from Canadian Surety Bond company to the next and may depend on the risks involved. Just remember that it is best to bide your time and shop around, so you can acquire a lower cost.