Buying Constructions Bonds Online
1. Geographical location
2. Complex underwriting
3. Difficulty adjusting to new ways of doing business
Geographical location: When dealing with a construction performance bond, some sureties may have difficulty providing significant financial backing to a contractor (principal) and is not geographically close to their bond agent.
Complex underwriting: The paperwork involved in writing a construction performance bond (contract bond) can be much more time-consuming and complex than some of the commercial bonds out there.
Difficulty adjusting to new ways of doing business: We’ve all heard the saying “you can’t teach an old dog new tricks.” Historically, most people that have been purchasing construction performance bonds are used to getting such surety bonds from their insurance company. Since that is “the way they’ve always done it”, many people/businesses find it hard to change.
The internet is clearly not just a fad. It is here to stay and be around for the foreseeable future. As more and more people use the internet, internet sales will continue to rapidly grow, and this will most certainly include the sale of construction performance bonds. In today’s high-tech world, sureties will need to stay at the cutting edge. Today, an increasing number of sureties are allowing bond agents to write surety bonds in each and every state in which they are licensed to do so. In an attempt to expedite the often cumbersome, time-consuming underwriting process, many companies are expanding their capacity. Finally, many contractors are beginning to realize that while purchasing a surety bond from the same company that provides them insurance may seem like an efficient way to operate, that is often times not the case. Many of these insurance agents do not have the breadth of knowledge that a surety bond agent can provide them, nor can they match the premiums. As more and more contractors come to this realization most will look to the internet to help them find the surety bond agency that is right for them.