What is a Surety Bond Underwriter?

An underwriter sits at her desk.
An underwriter is an important part of the bond process.

Understanding the Bonding Process

So you have found out you need a bond and are not quite sure how the process works.  You would first choose your source to apply for the bond.  It could be your local insurance agent or you can choose from one of many surety bond companies on the internet.  Both will help guide you through completing the bond application and attaching any additional documents needed to submit to a surety company for approval.

The surety company that receives your application employs underwriters who will review the documents you submit, the purpose of bond, your credit and in some cases financial statements and other relevant documentation.

Because a bond is backed by a surety company, there are various risks the underwriter will look at.  For instance, you may be required to have a $50,000 Florida Medicaid Provider bond that guarantees accurate Medicaid billing for reimbursement.  The underwriter looks at the language of the bond, reviews your credit and if there are partners, he/she will need to have their credit reviewed as well.  They would also look at your experience in the industry.  Have you billed Medicaid before?  Do you have a license such as a pharmacist? Have you ever been sanctioned? Have you filed for bankruptcy or have unpaid liens appearing on your credit report?

If the application is for a bid bond or payment and performance bond, the underwriter will request additional documents such as work on hand, income statements, balance sheets, a copy of the bid or a copy of the proposed contract, and other necessary documents.

The underwriter reviews each of these factors and others to determine: 1. Do you qualify for the bond? 2. If so, what will be the annual premium charged? 3. Is additional information needed to make a determination? 4. Will there need to be collateral collected or a Letter of Credit to support the bond approval?

After the review is completed, the underwriter will contact the submitting agent to let them know whether the application was approved or declined, and if approved, what will be the terms of the approval.  This would include the premium charged and the length of the term and any additional items needed to complete the transaction.

SuretyGroup.com can help you with the bond application process and get you the bond approval you need.

SuretyGroup.com – Your Online Bond Provider.

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  1. Max Sayer says

    I like the questions you asked about what the underwriter looks for. My cousin is looking to get a surety bond. I’ll have to share this blog with him.

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