Why Clients in the UK Shouldn't Use Their Insurance Broker for Surety Bonds

While your insurance broker might be a trusted advisor for traditional insurance policies, they may not be the best option for securing a Surety Bond in the UK. Here's a breakdown of why:

Surety Bonds vs. Insurance:

Different Products: Surety Bonds are not insurance. Insurance protects you from financial loss due to unforeseen events. Surety Bonds guarantee a third party (usually the government or project owner) that you, the principal, will fulfil your contractual obligations.

Financial Services Ombudsman (FOS) and Financial Services Compensation Scheme (FSCS) Limitations:

No Protection: The FOS and FSCS are designed to protect policyholders of regulated financial services, which excludes Surety Bonds. Some brokers may mislead clients by claiming these protections apply, leading to a false sense of security.

Limited Options with Large Brokers:

Internal Policies: Large insurance brokers often have internal policies restricting access to certain Surety markets, they do not disclose this to you leading you to believe the options they present are the only options available. These restrictions may be based on:

Remuneration: The broker might only access Surety companies offering the highest commissions, not necessarily the best rates or terms for your specific needs.

Commercial Relationships: Financial ties with specific Surety providers which are pre-agreed and can limit your options and potentially lead to higher costs.

Advantages of a Specialist Surety Broker:

Independent Expertise: Specialist Surety brokers such as Surety Bonds & Guarantees Ltd focus solely on Surety Bonds. They deeply understand the market and can access a wider range of Surety companies, ensuring you get the best possible deal.

Focus on Client Needs: Their primary concern is finding the most suitable bond for your project, considering factors like cost, terms, and risk mitigation strategies.

Strong Negotiation Skills: They have the experience and relationships to negotiate favourable terms and competitive pricing for your bond.

Conclusion:

For UK construction companies and businesses requiring Surety Bonds, relying solely on your insurance broker can limit your options and potentially increase costs. A specialist Surety broker such as Surety Bonds & Guarantees Ltd who have the expertise, access, and focus on client needs to secure the best bond solution for your project. Don't settle for a limited selection when it comes to your Surety Bond needs.

For more information please visit Surety Bonds and Guarantees or call 02476 017646