If you are a keen contractor, then you must have realized that there is a lot of growth in public construction. The industry looks promising for the future. However, this is not a niche for everyone. If you are a newcomer, then you need surety bonding to enable you acquire contracts. Below are some tips that you need in the entire process.
You must understand that companies use producers. Therefore, if you want to purchase surety bond in Los Angeles, this is the first process you must go through. You need to find someone who can meet your specific needs as a contractor. The producer will manage the contract and foster a business relationship.
Ensure that the producer is a qualified professional. Check if they are registered with the National Association of Surety Bond Producers. This type of membership ensures that the professional has met the basic needs to offers services in construction and other purposes. They also have an in-depth understanding of the surety marketplace. Moreover, they understand business strategies and underwriting variances among companies.
You must be taken through a prequalification process before you application is approved. Because you are entering into a very important business deal, you must show that your company s profitable apart from having a good track record. Your reputation in the industry matter. You will be evaluate from the way you relate with to subcontractors and suppliers to lenders and other stakeholders.
The prequalification process is normally very thorough. Underwriters will want to get assurance that your company has a good reputation and is financially stable. In the process, you may have to provide a list of top employees, their duties, and the value they add to your company. You should also have a business plan that clearly outlines your projects, their nature, and their locations.
Your company will also be requested to provide the fiscal year-end statements. This is normally for the past three years. Your financial statements may have to be audited by a certified public accountant. This category simply include income statement, balance sheet, statement of cash flow, schedules of contracts, accounts receivable and payable schedules, a schedule of administrative and general expenses, among other things.
You should also run a background check on the underwriter. On your part, you must also ensure that you are entering into a contract with a financially stable and reliable company. You can check for rating with the Federal Treasury List where different sureties are rated with a number grade.
Consider the total cost of the bond. The annual cost you will be paying is very important. This is the first thing most people look at, but that should not be the case. Nevertheless, it is still important to check the premium rates as well as the cost of the agent.
With these guidelines, you can enter the search more confident. Whether you are dealing with the agent or the underwriter, the level of service is very important. This will determine the type of relationship you will have in the future.
You must understand that companies use producers. Therefore, if you want to purchase surety bond in Los Angeles, this is the first process you must go through. You need to find someone who can meet your specific needs as a contractor. The producer will manage the contract and foster a business relationship.
Ensure that the producer is a qualified professional. Check if they are registered with the National Association of Surety Bond Producers. This type of membership ensures that the professional has met the basic needs to offers services in construction and other purposes. They also have an in-depth understanding of the surety marketplace. Moreover, they understand business strategies and underwriting variances among companies.
You must be taken through a prequalification process before you application is approved. Because you are entering into a very important business deal, you must show that your company s profitable apart from having a good track record. Your reputation in the industry matter. You will be evaluate from the way you relate with to subcontractors and suppliers to lenders and other stakeholders.
The prequalification process is normally very thorough. Underwriters will want to get assurance that your company has a good reputation and is financially stable. In the process, you may have to provide a list of top employees, their duties, and the value they add to your company. You should also have a business plan that clearly outlines your projects, their nature, and their locations.
Your company will also be requested to provide the fiscal year-end statements. This is normally for the past three years. Your financial statements may have to be audited by a certified public accountant. This category simply include income statement, balance sheet, statement of cash flow, schedules of contracts, accounts receivable and payable schedules, a schedule of administrative and general expenses, among other things.
You should also run a background check on the underwriter. On your part, you must also ensure that you are entering into a contract with a financially stable and reliable company. You can check for rating with the Federal Treasury List where different sureties are rated with a number grade.
Consider the total cost of the bond. The annual cost you will be paying is very important. This is the first thing most people look at, but that should not be the case. Nevertheless, it is still important to check the premium rates as well as the cost of the agent.
With these guidelines, you can enter the search more confident. Whether you are dealing with the agent or the underwriter, the level of service is very important. This will determine the type of relationship you will have in the future.
About the Author:
If you need a surety bond in Los Angeles come to Contractors Insurance Solutions. We specialize in tailor made contractors insurance policies and CA contractors license bonds, and you can find us online today at http://www.cisburbank.com.
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