How to verify a surety bond with UFG Surety’s Dennis Richmann

Fraudsters are everywhere nowadays, especially as digital processes continue to encompass our everyday lives. 

The same goes for surety bonds. Unfortunately, fraudulent surety bonds continue to be an issue for the construction and lending industries. But fret not, the UFG Surety team is on the case. 

Vice President and Director of Surety Dennis Richmann is here to discuss how to verify a surety bond so you can take steps to reduce the risk of buying an illegitimate bond.

What should contractors be aware of regarding legitimate or fraudulent surety bonds?

Richmann: Bonds are usually sold through an insurance agency or brokerage. Reputable and well-established agents and brokers will not sell bonds through surety companies that they have not fully vetted — let them do the qualifying work for you. Excessive bond rates can be an early warning sign that something’s amiss, as can the type of payment accepted or a payee on the check that does not make sense. Make sure you or your agent researches the individuals and companies you’re going to work with. If the agency or brokerage selling you the bond seems off or they do not feel professional, trust your instincts and consider going elsewhere.

Reminder read: 3 mistakes to avoid when purchasing surety bonds. 

What else can business owners do to verify a surety bond?

Richmann: If you do not recognize the surety name, search them online — what do you find? Many, but not all, companies can be found on the U.S. Department of Treasury Circular 570 listing. Even if you recognize the surety company name, it does not mean the bond is real. Make sure you contact the bonding company and vet them to verify the legitimacy of the bond. Many surety companies have websites that can verify bonds, or you can contact them either by phone or email to verify legitimacy. 

Should the party receiving the bond research the surety company?

Richmann: If you are the obligee, project owner or general contractor who is receiving the bond, you might also contact your agency/brokerage to send them a copy of the bond. They would be happy to research that surety company and the bond in question.

There you have it! These are just a few steps on how to verify a surety bond. Surety bonds come with a promise to perform but, first, let’s make sure you’re buying a legitimate bond. 

Need an insurance agent to help you get bonded? We’ve got your back.