Quote:
|
Originally Posted by Bond Magician Why are surety bonds so much more expensive than they were 10 years ago? |
Technically, they're not more expensive than they were 10 years ago
for credit-worthy clients - in fact, many rates are lower. What has happened, though, is that many companies are better utilizing filed rate deviations that allow them to modify the premium based on underwriting criteria. For example, a company whose tangible net worth is $15 mil will qualify for a better rate than a company worth $50,000. Further, you may recall the bankruptcies of Enron, K-Mart, among others. The claims paid by bond companies for those companies were tremendous and significantly altered the way all prospective business will be underwritten in the future.