In a recent poll conducted by the Insurance Business Association, underwriting responsiveness/turnaround time was listed by 93 percent of respondents as the most important thing producers look for in a wholesale broker or MGA.

The good news? With Allstar Surety, we have the ultimate authority to make decisions with no other third-party involvement, and we are nimble enough to underwrite on a good contractor quickly using common-sense principles.

We have placed an utmost importance on being overly responsive during these uncertain times, while also making it paramount to follow the streamlined underwriting procedures below:

Identify Risks

Once an applicant or principal has fully completed a contract bond submission and sent it to the surety company, an underwriter will determine the bonding risks involved.

The obligations of the surety and principal are "joint and several," in that it allows the obligee to recover from the surety, principal, or both on a financial level.

Surety underwriters have the authority to select which risks their bond company will approve or reject. They will determine the level of risk involved by:

  • assessing the actual obligation;

  • considering the agreement, regulations, and rules written on the bond form;

  • examining the principal's capacity to perform.

Use the links below to download Allstar's contract bond submission kit and emerging contractors application which uses a simplified process for bonds under $350,000.


Contract Bond Requirements Emerging Contractor Application


Understand Terms & Conditions

The second, and equally vital step, in the underwriting process is to understand the terms and conditions that affect either the principal’s performance, the bond itself, or the surety’s guarantee. These conditions and terms are found in the bond form, specific regulations, statutes, and ordinances. Using this information, an underwriter can increase or reduce the surety and principal’s obligation risk levels.

During these uncertain times, the underwriter will also take into consideration scenarios that might not have been present prior to the pandemic, such as availability of safety / PPE supplies, suppliers, subcontractors, or key personnel at the principal’s operation. Additional underwriting considerations as a result of the pandemic include a review of delay and “Force Majeure” clauses and how they might relate to added costs/triggering liquidated damages.

Allstar is doing everything that we can with the tools that we have (working with the SBA, the use of funds control, etc.) to help mitigate the risks. Allstar is also closely monitoring industry research as it relates to best managing these new underwriting considerations.


The Three C's of Underwriting


A surety underwriter must establish bonding relationship with a principal who has good character. Nobody intends to work with a dishonest and deceitful company or principal, which will likely cause losses.


Does the principal have the ability to perform the obligations described in the underlying contract? The principal’s capacity may evaluated on the basis of his or her own experience, knowledge, and expertise, or that of her or her staff/employees.


Does the principal have the financial means to fund their operations? Does her or she have the ability to financially respond in case they are unable to perform in keeping up with the terms and conditions of the contract?


Allstar Surety took prompt action to set up all personnel with the proper technology and procedures to ensure that we continue our quick response times, as the majority of our employees work remotely. We pride ourselves on our responsiveness and are doing everything that we can on our end to have zero interruptions in the way that we conduct business.


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