Facilitating the execution of minimum bids and payment bonds for agents and contractors

This post is part of a series sponsored by Old Republic Surety.

“We have targeted tight turnaround times from submission to approval using Old Republic Surety's (ORS) FastBond process – faster, better,” said Todd Taylor, CPCU, AFSB.

As the manager of ORS Bond, Taylor has seen the positive impact of FastBond, which has been in existence for more than 10 years. “We were able to simplify the lending process for agents by offering limits of up to $1 million based on credit alone,” he said. “And because there is no need for additional financial knowledge and no CPA required, that saves a lot of time and hassle. As part of the Fast Bond program, Old Republic Surety will process non-residential completion bonds of up to $250,000 in bond fines in credit-based underwriting. Higher limits can be considered with additional underwriting information.”

What if the client needs more? Taylor explains that they can still use FastBond to secure up to $2 million in a single or collective loan by adding current business and personal statements to their application – still no CPA involvement required.

Taylor notes a recent uptick in FastBond activity as well. “We have a history of underwriting accounts using sound writing, and Old Republic Surety is proud of our partnership with underwriting agents who may be smaller or have fewer or more unusual bond requirements. These are the types of accounts that really involve multiple agents. Although they may not be suitable for our side of the contract, they represent a real pillar of the construction industry.”

To keep agents competitive

To stay ahead of the curve and maintain a leadership position in these small account markets, Old Republic Surety solicits agent feedback and monitors industry conditions. “Like other sectors, the cost of construction has gone up, making the same risk come in at a much higher price than it did a few years ago,” said Taylor. “We've continued to adjust our limits as needed to keep pace with those changes, which is why we recently increased the limits from $750,000 to $1 million based on credit. FastBond's application is as simple as ever, but higher limits keep our agents competitive, and they can qualify for larger accounts with less underwriting requirements. Best of all, even at these higher limits, quick turnaround is still possible, which can be critical to winning a bid. “

As Taylor notes, contractors often put off dealing with bond issues until late in the bidding process, and rarely wait at the agent's office to get bond approval. “The pressure of bidding time can be overwhelming,” he says. “Our rapid turnaround alleviates some of that stress.”

While many agents are already comfortable with the FastBond application process, the ORS team is ready to step in and provide guidance to any agents who are new to bonds or may need help with the first few applications. “We can speed up the learning curve and double-check their work until they are comfortable applying on their own,” Taylor said, “But because the form is straightforward and the bond is primarily credit-based or only needs to be there. Financial statements of high value, many agents get information quickly. He adds that Old Republic Surety can also provide the ability to bond or a letter of eligibility if that is a requirement before any legal obligation.

FastBond can be a useful stepping stone for agents looking to help their clients transition to larger projects. “Few clients are able to jump into a standard bond program overnight, and some simply don't want to make the additional investments required, such as CPA involvement,” says Taylor. “With FastBond, higher limits help agents keep their growing accounts until they are ready to close on our side of the contract.”

FastBond benefits

While Taylor considers high limits, quick turnaround and a simple application process among the main advantages of FastBond, he also highlights the availability of the bond in all 50 states and the consideration of all construction trades. “This is a solution that's great for short-term projects in that $1 million to $2 million sweet spot, but with a lot of flexibility to talk about diversity,” he says. “Even if it is said that the work will increase a little, we want ambassadors to call us; we are always willing to discuss the underwriting details and dig into the details of the project to get approved. Old Republic Surety has always supported our bond approvals on more than just spreadsheet numbers. “

Taylor adds that the company will continue to test and modify FastBond as needed. Another recent development is the addition of DocuSign secure electronic signatures for applications. Some aspects of the workflow are updated regularly.

“Providing an easy integration process for minimal exposure is one of the best ways to increase the opportunities for our agents,” he says. “And Old Republic has really supported our efforts to improve the performance of small accounts. After all, more commitments mean more growth, and because a commitment may be considered small by industry standards or a client has an unusual need, it's still a need. We are here to make it as easy as possible for our agents.”

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