Surety Broker Questions:
Q: I am a Surety Broker, how do I obtain an E-bond for my client?
A: There are several commercially available software programs capable of creating reliable and enforceable electronic bonds (E-bonds) that meet the criteria of the Surety Association of Canada.
SAC has reviewed and assessed e-bonding systems and copies of these assessments are available for review and download HERE.
It is recommended that Surety Brokers directly contact either of these software program providers to obtain more information.
Q: Is there a cost for our brokerage to access and use one of these E-bond software providers?
A: Each software program provider determines their pricing and service offering, some offer flat fees, others offer pay-as-you-go pricing, etc. Our recommendation is to contact each provider directly to obtain more information to find the right solution for your needs and requirements.
Q: Do the software program providers only produce contract bonds?
A: No. Each software program provider’s system has the capability of creating commercial AND contract E-bonds. Once a Surety Broker has set-up an account and registered for access to the system, they will be able to create both commercial and contract surety E-bonds.
Q: Who’s corporate seal do I place on the E-bond?
A: Each Broker would be required to obtain Power of Attorney/Electronic Power of Attorney (e-POA) from a Surety in order to apply a seal on the Surety's behalf.
Most, if not all, Canadian Sureties already have their corporate seals loaded and available in each of the software program provider's systems.
Once a Broker registers and is granted access to the system, and have received confirmation from the Surety of the assignment of the e-POA, they can then use the corporate seal on any E-bonds that they create.
Q: If our client (Contractor/Principal) has been unsuccessful with their bid, how would an E-bid bond be released or returned?
A: An Owner (Obligee) will advise a Contractor (Principal) that their bid submission was unsuccessful, however, in the E-bonding world an E-bid Bond may not get returned, so instead of waiting for the validity period to pass (i.e. 30, 60, 90 days, etc.), Brokers should suggest to their clients to contact them to advise that the tender was unsuccessful.
Once the Broker is made aware of the unsuccessful bid, they will relay the same message to the Surety so that whatever room that particular tender took up on a Contractor’s surety bond line can be freed up.