8 Common Mistakes When Applying for a Surety Bond

Direct answer

These are eight practical mistakes seen often enough to be worth planning around. Avoiding them makes your submission easier to work with — it does not guarantee approval by an insurer or acceptance by the Obligee.

1. Starting too late

The bond is often left to the end, when the requirement, the documents and the evaluation all still need time. Work backwards from the Obligee''s deadline instead. See Why You Should Not Wait Until Bid Day to Arrange Your Bond.

2. Requesting the wrong form

A security requirement names a form; assuming which one it is leads to a bond that has to be redone. Read the clause first — and remember that Bid Security is the requirement, while a bid bond may be one permitted form of it. See What Is a Bid Bond?.

3. Sending incomplete information or documents

Missing annexes, partial scans and absent pages all have to be chased before anything can move. See Why Incomplete Documents Can Delay Evaluation.

4. Inconsistent names or transaction details

Where the company name, project title, amount or dates differ between documents, the difference has to be resolved. Verify the correct position and explain it. See The Risk of Submitting Incomplete or Inconsistent Documents.

5. Misstating or overlooking the required amount

The amount, or the basis for computing it, comes from the requirement itself. Confirm it from the document rather than from memory or a previous project.

6. Overlooking validity or timing requirements

Validity requirements relate to milestones in the underlying transaction. A bond that runs from the wrong date, or for the wrong period, may not meet the requirement.

7. Assuming an old bond form can be reused

Wording follows the Obligee, the contract and the obligation. Copying last year''s form into a new transaction is a common source of rework. See Do Not Assume One Bond Form Works for Every Project.

8. Not reviewing the issued bond before submitting it

Check the issued document against the requirement — parties, form, amount, obligation, dates. See Why You Should Read the Bond Wording Before Submission.

Important considerations

This list is drawn from ordinary practical experience. It is not any insurer''s list of reasons for rejection, and no statistics, rankings or rates are claimed for it.

Key considerations

Evaluation, underwriting, documentary requirements, terms, premium, approval and issuance remain functions of the applicable insurer or Surety. The Obligee determines and communicates its applicable bond requirement, subject to governing law and rules where applicable. SuretyPH provides information, accepts inquiries, supports document submission, facilitates applications and communicates status; it does not determine legal sufficiency, final bond wording, eligibility, approval, procurement compliance, acceptance by the Obligee or issuance.