Over the past few years, the cost of license and permit surety bonds nationwide has been dropping. While not true for every applicant and every bond type, the general trend has been toward lower bond premiums. This is clearly good news for small businesses and individuals in the market for new or renewal surety bonds.
The decline in pricing can be attributed to several factors. First, the overall economy is relatively strong and continues to show moderate growth. This means that businesses are doing well overall and insurers that assume the risk of loss on surety bonds are faced with fewer claims and loss payouts. Additionally, more insurers have decided to enter the commercial surety market and competition has led to even lower prices.
Another factor leading to lower bond prices is the growing use of technology to improve operating efficiencies at bonding agencies and insurance companies. Technological strides including automated underwriting and more robust bond management systems have led to lower operating costs. These lower costs are then passed on to surety bond buyers.