You may need to get a surety bond before finalizing a contract, earning a professional license, or starting a business. In all cases, speed matters. You can’t accomplish your objective until you can prove you have the necessary surety bond. Therefore, you need to learn the surety bond requirements and complete the surety bond application process without delay. Learn how to get a surety bond and avoid unnecessary obstacles and setbacks by getting all the surety bond documents you will need in advance:
Financial statements help underwriters (risk assessors) at the surety company evaluate your past and present financial situation. Underwriter’s whole goal is to decide how likely a surety bond applicant is to cause claims against the surety bond and how likely they are to pay the surety company back for those claims. Financial statements, along with the rest of the documents on this list, help to make that determination accurately.
For businesses with under $20 million in revenue, you will need to provide a financial statement from the previous year (a tax return will not suffice) including an income/balance sheet and a schedule of receivables and deliverables. Underwriters will also need an ongoing compilation for the current year to evaluate your financial position at the same moment when seeking a bond.
In addition to the financial statement for the company, underwriters will need financial statements from the major shareholders, evidence of business and personal tax filings at the state and federal levels, and a bank statement and letter of reference from the bank.
Businesses with revenues over $20 million can, in most cases, provide just a copy of a reviewed or audited financial statement from the previous year.
Bond Agent Questionnaire
As part of the surety bonding process, every surety bond agent develops a questionnaire to get a better understanding of bond applicants. The questions are always different, but usually they ask for a Tax ID number, the state of incorporation, and the current number of employees.
When applying for a surety bond, references give underwriters independent confirmation that your business is trustworthy and in good standing. If someone offers to write you a reference, the thinking goes, then your business must be capable of meeting expectations and delivering satisfactory work. To a certain degree, the contents of the reference matter less than your ability to obtain one. A business that couldn’t find anyone to refer them would be a large red flag for underwriters. It can take a while to get the references you need, so make this part of the surety bond process your first priority. Send a reference request to your most enthusiastic customers/suppliers, then get started on everything else while you wait for the response.
Certificate of Insurance
You will need to ask your insurance company for a certificate of insurance (COI). This document certifies that you have the insurance coverage mandated in the work contract or under the license agreement. Here again, underwriters use this document to establish whether your business works within the boundaries of the law – suggesting you will also work within boundaries of the surety bond requirements.
Work in Progress (WIP) Form
Underwriters are trying to evaluate the strength and sustainability of your business overall. But they also need to investigate whether you have the resources to complete specific projects. After all, a company with a sterling track record could quickly become overleveraged and start breaking contacts and generating surety bond claims. A work in progress form details all the jobs you’re working on now, all the jobs you have in the pipeline, and all the jobs completed over the previous year. Include details of any other surety bonds you have as well.
Resumes for Key Personnel
All it takes is one employee to do something that leads to a claim on the surety bond. To get a closer look at your employees, particularly those in leadership or project management positions, underwriters may ask for resumes from key personnel. This requirement isn’t a universal part of the surety bond process, but it’s something you should be willing and prepared to provide. Include a full employment history in each resume along with any notable credentials and accomplishments.
Viking Bond Service – Your Surety Agency
As you can see, it may take a day or two (or longer) to prepare all the necessary documentation. Make sure to get started as early as you can to account for any setbacks. Just as important, make sure to work with a surety agency that makes applying easy, efficient, and extra fast.
Viking Bond Service removes the roadblocks and speeds up the surety bond process so that you don’t have to waste time waiting to get a surety bond. When you apply, you will typically receive a quote within 24 hours. Pay the premium and then your surety bond requirement is met! Our underwriters will ask for some or all of the documents outlined above, but we use a simple, straightforward process that’s open to applicants regardless of bad credit.
If you have questions about specific surety bond requirements or about the surety bond process overall, our team has answers. Contact our surety bond experts and get expert information at no cost or obligation to you. Submit your questions through the contact form on this page, or speak directly to a team member by calling 1-888-278-7389.