Why construction firms must embrace digital bonding and surety

The introduction of digitization into the surety industry in construction has created an environment of efficiency where digital bonding is far more common than it once was.

The pandemic helped expedite this process. But there are still efficiencies to be achieved as it is common for surety brokers to issue performance bonds manually. Despite that, it’s easy to see a future for digitization in surety for the construction industry, simply because it stands to reap significant benefit from the time and cost savings.

Why embrace surety digitalization/?

There is significant incentive for players in the construction industry to embrace a paperless, fully digital bonding platform. A report from McKinsey and Company estimates that the world will need to spend approximately $57 trillion on infrastructure by 2030 to keep pace with GDP growth. In order to meet this demand, the construction industry will need to fully embrace digital solutions that can help transform organization, productivity and project delivery.

With so many pieces to the project planning puzzle, it can be challenging to manage a portfolio of projects without a specialized digital solution that helps support an efficient bidding and bonding process. Two key areas that can help them are advanced analytics for intelligent asset management and digital collaboration including moving to paperless projects. By utilizing a cloud-based software-as-a-service (SaaS), construction firms also can begin benefiting from the ease and efficiency of utilizing technology in surety and underwriting management systems.

Consequently, for firms that lean into the digitization transition, business is happening more quickly. By automating the manual process of bidding and approving contracts, firms can reduce time-consuming offline work and improve efficiency and workflows. The software enables carriers, producers, and their clients to benefit from automated underwriting, sales productivity, workflow management, document functions, and free up valuable time to focus on strategic marketing, forecasting, and portfolio management. A digital platform allows businesses, the insureds, to connect with brokers in real time.

Real-world applications

Imagine being on a job site and suddenly you need to check a figure on a contract. If you’re working on a cloud-based digital bonding platform, you can quickly logon and check all of your paperwork because it lives on the cloud and is accessible anywhere. Conducting business digitally reduces paperwork and reduces the likelihood of errors. Because information is typically entered into the digital system once, it’s unlikely that errors will be introduced at any point in the process so you can rest assured that your contracts are accurate throughout the underwriting process.

Embracing digital transformation with a bond management system involves several factors, but with the right partner and platform you can benefit in many ways. Both the construction and surety industries have adapted in times of uncertainty, whether it’s related to a global pandemic, supply chain disruptions or worker shortages. Construction and surety are resilient. It’s exciting to see how we adapt technology to benefit our industry and how we’ll continue to shape it to our needs in the future.

Jessica Mann (jrm@tinubu.com) is general manager/executive vice president of and chief revenue officer of Tinubu Square Americas. These opinions are the author’s own.

See also:

• California Contractor’s License Board increases bond limits for 2023
• Agents increasingly advising contractors to hire bonded subcontractors
• To survive supply chain chaos, construction & insurance must collaborate