When you try to purchase a bid or performance bond, it has to go into “underwriting” before you can actually receive your bond. So what exactly is contract surety underwriting and what goes into the underwriting process of a surety company? Surety bonds themselves are three party agreements providing a guaranty to an obligee that a principal will satisfactorily complete a project as per the contract and any applicable regulations. If there is a claim due to the work not being adequately completed for whatever reason, the surety company pays any damages to the obligee and then seeks indemnity from the principal. At Colonial, contract surety functions as a form of credit, with the underwriter making a decision as to whether to provide a bidder with a line of credit to be able to use to bid on projects. Underwriters often make this decision without having previously met the contractor. They do, however, require substantial financial and background information on the contractor to be able to make a sound and informed decision on that contractor. Contractors who provide that information in a most organized fashion will help streamline the underwriting process. Contract surety underwriters generally will require the following in initial submissions from contractors: three years of business financial statements, current personal financial statements, a questionnaire answering questions required by the underwriter, a current bank reference letter, and if you’re requesting support of a specific project, then details on that project should be included. Once you make your submission, the surety company should keep the applicant informed at every turn regarding where they stand in the underwriting process. Underwriters should clarify any conditions required to support the account in writing. Ultimately, the underwriting process should take no longer than 48 hours before a decision is handed down to the contractor. Colonial offers the direct and digital way to obtain bid and performance bonds. We are the insurance company — which means no agent, no broker, and no middleman. We make it easy to obtain your bond. The steps are easy — get a quote online, fill out your information, satisfy underwriting requirements, and enter your payment method. Print your bond from your office. It’s that simple!