If you’re an agent considering selling surety bonds, you probably have a lot of questions. This guide to frequently asked questions about surety bonds addresses common queries many agents have, offering insights into the process and shedding light on the benefits of selling surety bonds to current insurance clients.
Selling surety bonds is a strategic move for insurance agents looking to enhance their portfolios and provide clients with comprehensive risk management solutions. It’s also a great way to add an extra stream of income!
Why should insurance agents sell surety bonds?
Surety bonds are financial instruments that guarantee performance or payment between parties involved in a contract. As an insurance agent, selling surety bonds adds a layer of financial security to your client’s risk management strategies, making you a one-stop shop for their coverage needs.
5 Reasons Insurance Agents Should Sell Surety
- Diversify offerings: Selling surety can diversify your product portfolio, reducing dependence on any single type of insurance. Surety bonds allow you to tap into new markets, such as construction, transportation, and finance, with high demand for bonding services.
- Enhance client relationships: Offering surety bonds can strengthen client relationships by providing comprehensive solutions to their insurance and bonding needs, increasing client loyalty and retention.
- Cross-selling opportunities: Selling surety bonds opens up opportunities to cross-sell other insurance products to clients needing additional coverage.
- Expand revenue streams: Bonds often come with higher premiums and commissions, providing an additional revenue stream for your agency.
- Staying competitive: Offering a broader range of services gives you an edge over competitors who may not offer surety bonds.
Frequently Asked Questions About Selling Surety Bonds
1. How can selling surety bonds complement my existing insurance offerings?
Surety bonds complement insurance policies by addressing specific needs related to performance, payment, and other contractual obligations. By offering surety bonds, you enhance your ability to provide clients with a comprehensive suite of risk management solutions, creating added value for your services.
Overall, selling surety bonds enhances your agency’s offerings by providing additional revenue, strengthening client relationships, creating cross-selling opportunities, and expanding your market reach.
2. What industries typically require surety bonds?
While surety bonds are relevant across various industries, they are most prevalent in construction, real estate development, and government projects. Contractors, developers, and businesses involved in large-scale projects often require surety bonds to give project owners and stakeholders financial assurance.
Most Common Types of Surety Bonds
- Construction bonds: For government projects, public works projects, and some private-enterprise construction jobs
- License and permit bonds: Protect consumers and governments by holding businesses accountable to laws and regulations
- Court and probate bonds: Ensure people fulfill their legal obligations
- Fidelity bonds: Protect employers from damages associated with losses their employees may cause
3. How can surety bonds expand my revenue streams?
Selling surety bonds opens up new revenue streams for insurance agents. The construction industry, in particular, presents lucrative opportunities, as surety bonds are a standard requirement for bidding on and securing construction contracts. Partnering with a reliable surety provider can streamline the process, making it easier for agents to tap into this market.
Selling surety bonds can increase your profits by helping you:
- Earn higher premiums and commissions per bond.
- Secure recurring revenue through annual renewals.
- Capitalize on cross-selling opportunities for additional insurance products.
- Take advantage of volume discounts from bond companies.
- Generate referral business from satisfied clients.
- Target specialized markets with high demand for bonds.
4. What role does a surety provider play in the selling process?
Getting surety bonds can be complicated and tedious. Surety providers assess the financial stability and qualifications of the clients seeking surety bonds for you. Partnering with a reputable surety provider can ensure a smooth underwriting process for agents, making it easier to secure bonds.
Why ZipBonds? We can help your agency save time, remove uncertainty, and grow your book of business. Our team provides everything you need to sell surety bonds quickly.
5. How do I navigate the underwriting process for surety bonds?
Agencies often don’t have the carrier options, expertise, or capacity to provide their clients with the surety solutions they need. The underwriting process for surety bonds involves evaluating the client’s financial health, experience, and capacity to fulfill contractual obligations.
Working closely with a reputable surety provider streamlines this process, as they have the expertise to assess risk factors and determine appropriate bonding capacity.
Why ZipBonds? We work with top A-rated national and regional surety companies to provide you and your clients with the best options and value. We offer standard, nonstandard, and SBA options to serve you best.
6. Can I sell surety bonds to small businesses and emerging contractors?
Yes. Surety bonds are not exclusive to large corporations. Small businesses and emerging contractors often require surety bonds to secure contracts, bid on projects, and demonstrate financial stability to clients and government entities. Building strong relationships with surety providers enables agents to help smaller clients secure bonds and gradually develop their bonding capacity over time.
By catering to the needs of small businesses and emerging contractors, you can establish yourself as a valuable resource in this niche market. Additionally, as these businesses grow and expand, their need for surety bonds may increase, offering opportunities for long-term relationships and ongoing sales.
Why ZipBonds? We offer pre-qualification for contract bonds in two minutes or less! Contractors and agents (acting on behalf of clients) can pre-qualify for various contract bonds up to $750,000.
7. How can I get someone bonded with bad credit?
One of the most common concerns agents have is, “Can my client get bonded with bad credit?” Your surety provider may offer a variety of options for applicants with low credit scores, such as:
- Co-signor option
- Funds control
- Paying a higher rate
- Providing strong business or personal references
Why ZipBonds? We have substandard options that may include higher rates, co-signers, collateral, funds control, etc. Call us if we can help! And be sure to ask us about our Bad Credit Surety Bond Program.
8. How long does it take to deliver surety bonds to clients?
Your surety provider may issue your bond within hours or days of your application, depending on their review and underwriting process.
Why ZipBonds? Our speed of service is second to none. Many bonds are approved and issued instantly from our website. Even for bonds that require review and underwriting, we always strive for a 24-hour turnaround time.
ZipBonds for Agents: Simple. Fast. Pre-Approval.
ZipBonds for Agents is a platform we created to help agents sell surety instantly with ease and confidence. We make it simple, fast, and seamless. You can pre-qualify to sell surety today on our website! If you have any other questions about surety bonds, call us at (888) 435-4191. We’d be happy to talk to you and answer any questions you have.