Generally speaking, the more bonds a company needs to support its revenue stream, the more bonding will be considered a critical piece of the company’s strategy for success.
On the other hand, if a company needs very few bonds or can survive just fine without bonding, the “surety function” simply may not be that important to the business owner.
The level of “bonding importance” is something that surety brokers and underwriters take into account, because it affects two important areas.
First, companies with few bond needs generate little revenue for the surety, so a surety may simply not be that interested in doing all it can to be supportive of the company.
Second, the business owner may not always be firmly committed to helping the surety get what it needs if the bonding function is not critical to business success.
Thus, knowing the relative importance of bonding to a business owner can drive decision making on both sides of the table. No matter the size of the company, all options should be considered.
Contact me to discuss more about Surety Bonds.