- 1. What is a bond for? What does it do?
- 2. What is the purpose of having a surety bond if I have to reimburse the surety for claims?
- 3. What types of bonds do you write?
- 4. How do I know what type of surety bond I need?
- 5. What is an obligee?
- 6. Where do I find the obligee's address for the application?
- 7. How much will my bond cost?
- 8. How do I get a quote for a bond?
- 9. I have bad credit. Can you help me?
- 10. On the application, is the owner tax ID the same as the FEIN?
- 11. What do I do after I receive my quote?
- 12. Do I have to pay the entire premium for the bond before it can be issued?
- 13. Why is the quote so expensive? I don't agree with the price.
- 14. What is an indemnity agreement?
- 15. Why do I have to sign the indemnity agreement personally as well as corporately, and why does my spouse have to sign when he/she is not involved in the business?
- 16. How long does it take to receive the bond?
- 17. Can you send the bond to me overnight?
- 18. Will you mail the bond to the obligee once it is issued?
- 19. I have my original bond. Where do I sign?
- 20. Where do I send the original bond once I receive it?
- 21. When my bond comes up for renewal, will you notify me?
- 22. What other things, besides a bond, do I need in order to get my license?
- 23. If my bond is for a company and not an individual, is it based on personal or corporate credit?
- 24. I have not received my renewal bond. Where is it?
- 25. I received a rider or continuation certificate in the mail. What do I do with this?
- 26. Do you offer bond terms for more than one year?
- 27. How do I become an appointed agent with The Bond Exchange?
- 28. Do you write bonds in every state?
- 29. I am licensed in several states. Can I get one bond to cover all of the states?
- 30. What is a cancellation provision?
- 31. What is collateral security?
- 32. Can I cancel my bond mid-term?
- 33. How do I make an online payment?
- 34. Do I need to log in to make a payment?
- 35. Where do I find my invoice number?
- 36. I put my invoice number in to make a payment, but it is not pulling up my account. What do I do?
- 37. What is the extra charge when paying online?
- 38. Will I get some sort of receipt for my payment?
- 39. The payment screen keeps telling me that payment has failed. What do I do?
- 40. My bank account is now showing numerous payments to your company, yet my credit card payment was only accepted once. What do I do?
- 41. How should insurance agents go about making payments?
- 42. Do you take payments by telephone?
- 43. I forgot my password and had a new one forwarded to my email. The new password is not working. What do I do?
- 44. On my application, it asks for a license number. I cannot get a license number until I obtain the bond. What do I enter here?
- 45. My application is stuck on a page and won't move forward. What do I do?
- 46. I entered something incorrectly on my application. How do I fix it?
- 47. The website will not let me do shorter than a four month term. What do I do?
- 48. My bond was mailed out a significant time ago, and I still haven't received it. What do I do?
- 49. I need proof that my bond is still in effect. Who do I speak to?
- 50. I need a copy of my original bond (different from needing proof that it is still in effect). Who do I speak to?
- 51. I need to request cancellation or non-renewal of my bond. Who do I speak to?
- 52. I need to request cancellation or non-renewal of my bond. Who do I speak to?
- 53. How do I make changes to an existing bond?
- 54. I received a notice of cancellation regarding my bond. Is there any way to fix this?
- 55. Is there a charge for endorsements or continuation certificates?
- 56. What is the difference in a mortgage broker, banker, and lender?
- 57. I am a mortgage broker in Colorado, and I am covered under my employer’s company E&O policy. Do I have to obtain an individual policy to satisfy the state requirement?
- 58. What is the difference in E&O and Fidelity?
- 59. I am a mortgage broker in Colorado, and I am covered under my employer’s company E&O policy. Do I have to obtain an individual policy to satisfy the state requirement?
- 60. What is a contract (construction) surety bond?
- 61. What is a bid bond?
- 62. What is a performance bond?
- 63. What is a payment bond?
- 64. Who pays the bond premium on these bonds?
- 65. When is the bond premium due for these bonds?
- 66. What is the cost for Performance and Payment bonds?
- 67. What is a maintenance bond?
- 68. What is a supply bond?
- 69. What is a subdivision/developer bond?
- 70. What is a subcontract bond?
- 71. Can a start-up company guarantee for contract bonding?
- 72. How does the surety know when the performance and payment bond is released?
- 73. To obtain contract bonds, will collateral be required?
- 74. What information is required to consider support of a bid or specific contract performance and payment bonds?
A bond is a transfer of liability between at least three parties: the principal (the party applying for a bond), the obligee (the party requiring the bond), and the surety (the party who ensures that the obligation is met). A surety bond guarantees that an obligation will be fulfilled and protects the obligee against losses due to the principal’s failure to meet the obligation.
Most surety bonds are needed as part of a license requirement. The obligation is specific to the bond form, but it generally states that the principal (applicant) will comply with all of the rules and regulations as outlined by the law. The bond is to protect the people that you do business with, not your company.
We write all bonds with the exception of bail bonds. If you do not see the type of bond you need on our applications page, simply complete the All Other Bonds application on the bottom of the page. Be sure to include the obligee (the person requiring the bond) and all obligee information.
There are many types of surety bonds, and the best way to find out which kind you need is to ask the obligee.
The obligee is the person or entity requiring that you obtain a bond.
You can either contact the obligee and ask them for their mailing address, or you can look on their website, if one is available. For some types of bond, the obligee address even pre-fills on the application to save you time.
The rate for your bond will depend on a variety of factors. Most surety companies will have a minimum premium of $100.00 annually. The rate above that will depend on the bond type and underwriting information, such as personal credit. However, rates may begin as low as 0.5% and could be as high as 15% of the bond amount.
The only way to get a quote from The Bond Exchange is to apply for a bond. You can apply on our website by registering as a user, or you can email us and request a paper application at email@example.com.
We do have a program for high risk applicants. We will need an application completed, either on our website or a paper application emailed or faxed to us, in order to provide a quote.
No. The owner tax ID is where the owner’s social security number is supposed to be provided.
Your quote will be sent to you in an email as long as we have an email address provided to us for contact. The email will contain instructions. Read the instructions carefully and follow them. Before we can issue the bond, we will need payment and, in most cases, a signed and witnessed indemnity agreement. There are cases where more is required, such as personal financial statements, business financial statements, and other information.
Yes, we do require the entire premium to be paid before a bond can be issued. We are not able to accept installment payments on the premium.
The quotes that we give are based on personal credit. We work hard to ensure that we give you the correct rate based on your personal credit. We are always willing to take a second look. If you genuinely feel that you have been quoted incorrectly, send us a request to re-quote at firstname.lastname@example.org.
An indemnity agreement (or General Indemnity Agreement) is often required by the surety company when a bond(s) is issued. This is a legal contract. The indemnity agreement states that a principal (applicant) will reimburse the surety in the event a claim is paid out. Most surety companies will require all owners and spouses to sign this agreement. This is the difference between bonds and insurance. Surety companies underwrite off no losses and generally charge a small annual premium for the bond.
Personal indemnity is often required by the surety company as the surety will review personal credit scores and financial statements during the underwriting process. The underwriting used to determine qualification of the bond will include personal assets. Spousal indemnity is required as many personal assets are shared. This also ensures that the personal assets used for underwriting are available to the surety in the event of a claim and not transferred to a spouse.
As long as we receive all necessary documents and payment before 2:30 PM CST, we issue the bond that day and put it in the mail. The Bond Exchange is not responsible for the time that it takes for the United States Postal Service, FedEx, UPS, or any other mailing service to deliver the bond to you.
Yes, you may add this to your payment if you are using a credit card to pay online. When it asks for mailing options, you can select to use our FedEx account for a $25.00 fee, or you can input your own FedEx or UPS account number, if you have one. If you are mailing us a check, you can add $25.00 to your payment and specify that you are paying for overnight, or you can provide us with your FedEx or UPS account number in the envelope somewhere.
No, the bond will be mailed to you (or your insurance agent, if applicable), as you will need to sign as principal.
Every bond form is different; however, you will sign the bond as principal or applicant. Some bonds require a witness. This should be a third party that is not related to you. Some bonds also require notary acknowledgment.
When you receive the bond, make sure that you sign it in the appropriate places, date in the appropriate places, and have notarized if required. You should always make a copy for your files, and you have to send the original to the obligee.
Yes, we will send you an invoice at least sixty days prior to the expiration of your bond.
The best way to find out all of your licensing requirements is to contact your obligee.
Bonds are based on personal credit of the applicant or owner(s). If there is more than one owner, an average of the credit scores will be taken. We will also look at personal financial statements and corporate financial statements if necessary.
In most cases, we do not issue renewal bonds because they are not required. Some states require a continuation certificate to be issued showing that the bond remains in effect. If a continuation certificate is not required by the obligee, we do not mail one out. If, for your personal files, you would like a continuation certificate, you can request one at email@example.com.
Check to make sure that the rider or continuation certificate does not need to be signed by you. If it doesn’t, make a copy for your records and forward the original to the obligee.
In most cases, we only offer bond terms for more than one year if the state statute requires the bond be for an extended term.
We do not make appointments, but we do pay all agents 10% commission on commercial surety lines and 30% of revenue on contract surety bonds.
Yes, we are licensed in all fifty states.
Unfortunately, the answer is no. Every state has a different bond requirement and bond form.
A surety company is allowed to cancel a bond at any time, per the cancellation provision. The provision states that the surety may cancel the bond by giving a specific number of days’ notice to the obligee. The number of days varies per bond. Generally, the cancellation provision ranges from fifteen to ninety days.
If an underwriter is unable to approve a bond request based on the qualifications given by the principal, the company may suggest depositing some form of collateral as an inducement to write the bond.
Yes, we require a written request be provided via fax or email. In regards to returning premium, however, if the bond is still it its first term, the premium is fully earned. If a bond is cancelled mid-term after its first term, the surety will pro-rate the premium and returned the unearned portion. However, The Bond Exchange still retains all commissions and fees.
You can make payments on our website by clicking the payment tab, entering your invoice number and amount, entering your credit card information, and clicking “pay.”
No, you need only go to the payments tab. Logging in is not necessary.
If you are writing a new bond with us, the invoice number is provided in your quote as either a five digit number or a number series preceded by a W. If you are renewing a bond with us and were mailed a statement, the client number in the top right box on the statement is the correct number to enter here.
The invoice number serves only as a reference for our accounting department when applying your payment. The invoice number will not pull up your account.
There is a 4% convenience fee for paying by credit card. If you are opposed to paying this fee, you are welcome to mail us a check. However, please keep in mind that we cannot issue the bond until we receive payment.
A receipt for the credit card transaction is emailed to the email address that you provide on the credit card information
Firstly, make sure that you are entering the information exactly as it reads on the card. If the card has a business name along with a personal name, try putting whatever is on the first line in the first name slot and whatever is on the second line in the last name slot. If this does not solve it, do not continue to try to post the payment, as this can result in a hold on your credit card. Contact your bank and see if you can find out what is going on. Some banks have a cap on daily spending, or there might just be a problem with the card.
Any time a credit card payment is declined on our site (when it tells you that payment has failed), your account will show a charge. However, if the charge is not accepted by our system, it will clear off of your account in a few days. The number of days will depend on your bank or credit card company.
Insurance agents must pay with an agency check or money order or an agency credit card (if paying on the website).
No. We take payments online or by mail.
The new password works. You cannot copy and paste the password from the email in; it must be manually entered. It is also case-sensitive, so you must make sure that you type in exactly what is in the email.
The application will not let you proceed with any blank spaces. If it is a text field that does not apply, simply write “not applicable” in the space. If it is a number field, such as a license number, fill the space with 9’s.
Firstly, make sure that you have all text fields filled in. The application will not move forward with blank spaces. If the spaces are all filled in, this is most likely a browser issue. You can try refreshing the page, which could cause you to lose what you have entered on that page. If you continue to have problems, you can request a paper application at firstname.lastname@example.org.
You can go to the My Account page once you log in and click “make changes.” If you need to change term dates, such as effective or expiration dates, you must submit a new application.
Our policy is not to write any bond shorter than a four month term. You will find that most surety companies are not comfortable writing anything shorter than this. The solution if, let’s say, the bond has a statutory expiration date required by your state, is to do an extended term. If your bond has to expire on 12/31, and it is 10/1/11, make the expiration date of the bond 12/31/12. This way, the bond is a year and three months instead of only three months long. If you enter the dates in correctly, the quote that you are sent will be correctly prorated.
You can email a request for a duplicate original to email@example.com. Please include a bond number as well.
You can email a request for a continuation certificate to firstname.lastname@example.org. Please include a bond number as well.
You can email a request for a bond copy to email@example.com. Please include a bond number as well.
You can email a request to cancel or non-renew to firstname.lastname@example.org. Please include a bond number as well.
You can email a request to cancel or non-renew to email@example.com. Please include a bond number as well.
When bonds need to be changed, riders can be issued reflecting these changes, such as address or name changes. To request a rider, email firstname.lastname@example.org with exactly what you need changed. Please include a bond number as well.
If your bond is still within its cancellation provision, you can request reinstatement by emailing email@example.com. Please include a bond number as well. There is a $25 reinstatement fee that can be paid on our website or by mailing us a check or money order. We cannot request reinstatement until we have this fee.
Unless there is a change in the premium amount due to an increase, extension, etc., we provide riders at no additional charge. However, we reserve the right to charge a fee if riders become excessive. The same goes for continuation certificates.
A mortgage lender is a financial institution from which you receive money to purchase a home. A lender gets the money from investors or its own customers if it is a consumer institution such as a bank. A bank can be a type of lending institution. A credit union, a mortgage lender, a stock brokerage, or a savings trust can all be lenders. Any institution can be a lender if it has the money and has complied with the right regulations. A mortgage banker is a company, individual, or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. After a mortgage is originated, a mortgage banker might retain the mortgage in portfolio, or they might sell the mortgage to an investor. Additionally, after a mortgage is originated, a mortgage banker might service the mortgage, or they might sell the servicing rights to another financial institution. A mortgage banker’s primary business is to earn the fees associated with loan origination. Most mortgage bankers do not retain the mortgage in portfolio. A mortgage broker is a person whose job it is to bring together lenders and borrowers. For a commission, a mortgage broker will work to secure a loan for you from any lending institution with which he or she has a working relationship.
Yes. The Colorado Division of Real Estate requires that all mortgage originators have an individual E&O policy.
Professional liability (E&O) covers your company’s legal liability for errors and omissions made in the rendering, or failure to render, professional services such as loan origination, loan processing, loan closing, loan underwriting, loan marketing, and loan warehousing. These professional services may protect against claims alleging: ESCROW determinants, ARM miscalculations, loan underwriting guideline misinterpretations, wrongful foreclosures, wrongful truth in lending disclosures, negligent acts, mortgage broker/origination disputes, wrongful appraisals, or unintentional loan discrimination. These are some areas in which you may have coverage. This list is not all-inclusive. A fidelity bond, sometimes called commercial crime coverage, is a bond which indemnifies the insured for loss caused by dishonest and fraudulent acts of its covered employees. In addition, a fidelity bond typically covers the insured against the following: forgery or alteration, loss inside the premises caused by theft, disappearance and destruction by an employee, or computer crime coverage. This is not an all-inclusive list, but demonstrates some areas in which you may have coverage under a fidelity bond.
Yes. The Colorado Division of Real Estate requires that all mortgage originators have an individual E&O policy.
There are various types of contract surety bonds. The type required is determined by the obligation that is in need of the guarantee. In most cases, contract surety refers to performance and payment guarantee for a specific project.
A bid bond guarantees the owner/obligee that the principal (contractor) will honor their bid and enter in to contract and provide required guarantees if awarded the project.
A performance bond guarantees the owner/obligee that the principal (contractor) will perform and complete the contract in accordance with the terms of the contract, including the price and time.
A payment bond guarantees the owner/obligee that the subcontractors, suppliers, or laborers will be paid monies due them from the principal (contractor) in connection with the specific bonded contract.
The owner eventually pays all costs associated with their project. When bonds are required as part of the bid specifications, contractors will include the cost of the bond in their estimating job costs.
The premium due on contract bonds is typically due upon issuance and release of the bonds required.
Performance and payment bonds guarantee a specific contract; therefore, premium for the bond is based on the contract price, not bond amount. The surety will quote the rate on a per-thousand basis. The surety will consider the risk associated to the guarantee in order to determine the rate for that specific risk.
While normally included as part of the Performance and Payment bond guarantee, this type of bond may also be obtained to provide protection against defective workmanship and materials.
A supply bond will guarantee the performance of a contract to furnish supplies or materials in connection with a specific contract.
A subdivision/developer bond is a bond running to city, county, or state to guarantee the principal will finance and construct certain improvements such as streets, sidewalks, curbs, gutters, sewer, drainage, etc. This is usually required from the owner of the development of subdivision. However, in some cases, the owner will pass the obligation to the contractor.
A subcontract bond is a bond that is required of subcontractors to guarantee that the subcontractor will perform the subcontract in accordance with terms and will pay for certain labor and materials incurred in the prosecution of the contract.
Yes, this may be more difficult, but it is not impossible. Proven experience in addition to pro forma financial statements, establishment of a Line of Credit with a bank, and, in some cases, collateral, will be required.
In addition to the contractor advising of the project’s status, sureties routinely send out job status inquiries to the owner of the project to monitor the progression of the project they have bonded. This allows the owner to relay progress as well as notify the surety of any concerns.
The use of collateral varies on the individual situation. An Irrevocable Letter of Credit or Cashiers Check equal to a specific amount may be required by the surety to offset a portion of the risk.
In addition to the details of the contract being considered for bid or contract guarantee, the surety will require details of the applicant’s financial condition, both personal and corporate. Prior experience and capacity will also be considered. This information is obtained through completion of a contract bond package and routine examination of the information provided.