Beginning with Amtrust’s acquisition of Builders & Tradesmen Insurance Services in 2011, speculation has grown in the industry as to whether or not Amtrust would throw their hat into the California contractor license bond arena. As of last week, the rumors have become reality and the full details of the program have been released along with their product debut.
The Amtrust license bond program is intended to provide contractors with a cost effective bonding alternative through Wesco Insurance that will replace Navigators in their surety bond lineup. While it’s a little premature to evaluate how this newest bond program will affect average bond rates industry wide, early results indicate they are looking to be very competitive for a broad range of contractors and credit profiles, which should be very welcome news for California contractors.
Over the past few years, many contractors have become frustrated at license bond rates that seem significantly higher on average than in years past. While many sureties have had to adjust pricing to cover increased loss trends in recent times, it’s always good news when sureties have to compete to earn contractors business. At the very least, Wesco’s entrance into the California contractors license bond marketplace will keep sureties on their toes in offering the most competitive bond rates they can, while also remaining financially sound.
Below are a few benefits contractors will be excited to learn about with regards to Amtrust’s newest license bonding program:
Package Discounts When Liability Insurance is Combined with An Amtrust License Bond
Wesco is currently offering contractors a 10% package discount on their Victory Admitted General Liability insurance when a contractor purchases an Wesco bond. This discount can amount to a significant savings for contractors that have a need for liability insurance, in addition to their required contractors license bond.
License Bonds for All Classifications Including Pool and Roofing Contractors
Pool and roofing contractors often feel their license bonding options are limited when compared to other classifications and to a large degree this characterization is true. Many surety programs offer license bonds for most contractors license classifications, while omitting pool and roofing contractors. The added competition should help keep rising bond rates for these contractors in check.
Cosigners Available for Contractors with Bad Credit
Contractors with poor credit may have the option of utilizing a cosigner under the new Wesco program; however, the cosigner program is not available for roofing or pool contractors at this time. Similar to the Navigators program, contractors that qualify for a cosigner rate will have the option of utilizing a cosigner.
Competitive California Contractor License Bond Rates
Contractor license bond rates in California are generally based upon a combination of credit and other factors relating to a contractors history for most sureties and Wesco is no exception. With this in mind, their tiered rating program may be competitive in comparison to other sureties looking to reduce license bond exposure to California contractors. Contractors may want to consider shopping their license bond each year if they are unhappy because rates can change substantially based upon a contractors unique characteristics and generally speaking, no surety will always have the lowest bond rates for all contractor profiles.
By Jeremy Schaedler