Thursday, December 2, 2010

Liberty's Expanding Product Line. BONDING

We are always looking to expand our products and services for our current and future clients.  We research and negotiate only with top rated insurance and financial companies by AM Best.  This is why were are very excited to introduce a few of our latest additions to a fast growing insurance product base through CNA Surety and 16 additional major bonding companies. 

In recent months we have seen a increasing need of brokerage firms that offer Bonding to their customers.  Bonding is a unique line of business that, from our experience, is a somewhat feared product line in our field.  It is often required by an Obligee (party who is requesting service to be performed) to enter into a contract.  It is very unique in the way it is underwritten, as well as the terms the bond guarantees and is often commingled with insurance, but is better understood as a line of credit.  We refer to it as a line of credit due to the nature of claims and losses.  If a claim was deemed valid by the Surety (3rd party, often an insurance company which provides the financial guarantee), the Principal (party who agrees to perform a service or meet obligations) would be financially responsible to pay for all losses, including legal fees, back to the Surety.  This is much different than a typical insurance claim which does not require indemnity to the insuring company for losses paid.

Now you ask: "Why do I need bonding if I am financially responsible for payment claims?"
The Answer: Without Bonding, the Principal (party who agrees to perform a service or meet obligations) will need to show proof that they are financially able to post the dollar amount required of the bond limit.  If you are entering a contract with a required bonding limit of $1,000,000; that cash or credit will be tied up for the period or satisfactory completion of the contract.  Bonding will free up that capital with a down payment as low as 1%.

There are 3 major bonding categories that we can provide for: Commercial, Contract, and Court.  Each of the categories has multiple subcategories and involves a guarantee of either performance, payment, or other obligations as stated.  Liberty Insurance Services now has the ability to aggressively negotiate bond terms and search for the best available rates due our association with the largest carriers. 

Quotes can typically be acquired very quickly; more often, the same business day.  We know that Your Time is Valuable.  Contact Us to find out more! 

Office: (215) 331-7382

Check Us Out On FACEBOOK


Post a Comment