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Under the leadership of trade groups like the Construction Progress Coalition, ConsensusDocs, XBRL US, along with the Department of Energy and many others machine readable data standards have been established for the ecosystem of stakeholders involved in construction.
Transitioning to digital surety bonds for the efficiency it provides, the data analytics it enables, and the reduced cost over traditional manual processes and procedures is here.
The workflow is basically the same as paper bonds, but instead of hours of manual preparation, the expense of delivery and the data locked in an image, online systems can now accomplish at a fraction of the time with limited expense and data that be unleashed by every stakeholder.
Welcome to digital surety.
K. Dixon Wright
Senior Vice President - Surety
USI Insurance Services LLC
201 Mission Street
Suite 1100
San Francisco, California 94105
CA DOI 0G11911
415-717-1092
Paper Surety Bond
Issued manually with wet signatures for each person signing the bond.
Data extracted manually or by OCR with potential errors.
Time to complete:
Total - Over one hour
Process for issuance
The receiver of the bond needs to confirm:
Validation
One the bond review is complete the receiver needs to validate the bond by manually contacting the surety or by submitting a manually prepared form to the surety
Electronic Surety Bond
Issued manually with digital signatures for each person signing the bond.
Digital signatures provided by companies like DocuSign, JotForm, HelloSign, PandaDoc, Adobe Sign, Qwilr, HoneyBook, AND.CO, Proposify, GleanQuote, SignNow and eSign Genie.
Data extracted manually or by OCR, with potential errors.
Time to complete:
Total - Over one hour
Burden to complete:
Process for issuance
The receiver of the bond needs to confirm:
Validation
Once the bond review is complete the receiver needs to validate the bond by manually contacting the surety or by submitting a manually prepared form to the surety
Digital Surety Bond
Issued online and distributed by email, or secure download, with standardized data elements that can be imported with bond text incorporated by reference to the specific bond form.
Can be viewed and printed as a PDF.
Data elements are importable error free.
Time to complete:
Total - Under 20 minutes
Process for issuance
Validation
Done online with Bond Validation number
Because of electronic surety bond provider system and process checks the receiver of the digital bond does not need to confirm:
Bond form is completed accurately
Power of attorney is completed accurately
Limit of authority is consistent with the bond amount.
Notary for accuracy and consistent with person executing the bond
Surety is licensed in the jurisdiction
Surety has an acceptable BEST rating
Surety has an acceptable T-List for the bond amount.
As an extra step some bonds require additional wet signatures as witnesses.
What is the legal difference between a manually prepared paper bond, and electronic bond and a digital bond?
How is the process for securing an digital surety bond different than a paper bond?
What is the efficiency difference between a manually prepared paper bond and a digital bond?
How does the XBRL data standard digital bond improve efficiency over the paper bond?
How can just the one XBRL standard digital bond form cover all the different obligations, contracts and circumstances?
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