At Lussier, we understand how essential surety bonds are for companies wishing to participate in public or private tenders. This strategic leverage gives you access to major contracts while preserving your financial capacity. Drawing on our expertise in surety bond brokerage, we can guide you through each stage of this often-complex process.
A structured approach: the steps to obtain a surety bond
1. Financial assessment of the company
The first step is a rigorous analysis of your financial situation. The insurer examines:
- your external financial statements for the past two years (prepared by an accountant, usually a review engagement);
- your most recent internal financial statements;
- financial ratios (working capital, debt, profitability, equity);
- bank confirmations and available lines of credit.
Financial strength is a fundamental criterion for establishing your ability to meet contractual obligations.
2. Analysis of character and competence
Beyond the numbers, the insurer assesses the so-called “qualitative” elements grouped under “CTF”:
- Character: integrity, transparency, reputation, behavior in difficult situations.
- Technical capacity: experience on comparable projects, team expertise, past achievements.
- Financial capacity: company's overall situation, compliance with insurers' financial requirements.
Lussier will work with you to highlight these elements and build a solid, convincing case.
3. Preparing the file
Complete documentation is required to open and review the bond file. Here are the main elements required:
- external and internal financial statements;
- personal balance sheets of principal shareholders;
- up-to-date list of accounts receivable and payable;
- company information form;
- details of current and planned projects;
- information on subcontractors and suppliers (for payment bonds);
- financial statements of affiliated companies, if applicable.
We ensure that each item meets the bonding company's requirements.
4. Presentation of the file and issuance of the offer
The file is submitted to a surety company for analysis. If the assessment is favorable, an offer of service is issued. This offer provides for the opening of a global bonding margin which may include:
- an overall annual ceiling for all bonded contracts;
- a ceiling per individual contract.
The offer is generally valid for a period of one year and is conditional on continued compliance with certain financial requirements (ratios, project management) and the signing of an indemnity agreement by the officers or shareholders.
5. Follow-up and updating
Once the margin is in place, the company can request surety bonds on a case-by-case basis. However, the surety company requires constant follow-up:
- annual update of financial statements;
- status of work in progress;
- documentation of new projects;
- monitoring of key ratios;
- progress reports, commitment letters, potential claims or complaints.
Lussier accompanies you in this follow-up to maintain your access to guarantees and avoid project interruptions due to incomplete or out-of-date files.
Why choose Lussier?
With over a century of expertise in insurance services and a department entirely dedicated to surety bonds, Lussier stands out for:
- in-depth knowledge of insurers' requirements;
- personalized assistance in setting up and monitoring your file;
- privileged access to a vast network of specialized insurers;
- our ability to negotiate the best terms and conditions for our customers.
Our team acts as an extension of your business, guiding you through every step of the process with rigor and clarity.
Need a surety bond?
Rely on Lussier's expertise to structure your file, optimize your chances of approval and enable you to seize business opportunities with confidence.
To benefit from our expertise, contact us here or by phone at 1 855 LUSSIER (587-7437).
