March 29, 2022 | Customs Bonds
4 Ways to Evaluate a Customs Bond Provider: An Important Guide for Customs Brokers
An import bond is more than a simple commodity. Choosing the right customs surety bond provider can add stability and certainty to your business as well as the flow of your import clients’ goods. Properly vetting your customs bond provider and the surety company they represent will help you deliver on your client’s service expectations.
Here are some essential characteristics to consider when making this critical decision.
1. Longevity, Experience, and Service
A good starting point in the vetting process is to look for a partner that demonstrates staying power in the industry and aligns with your company’s standards and principles. In addition to longevity, do they show a commitment to service and retain an experienced staff? Are resources in place to support you and your clients for as long as you need them? Finally, can they provide expertise and guidance to help you effectively manage the impact of regulatory and market changes?
2. Financial Strength of the Surety Company
A financially sound surety ensures stability for your customers, and knowing the company your provider selects is vital for the vetting process.
The primary goal of a customs bond is to assure compliance with all laws and regulations governing import transactions while also guaranteeing payment of duties and taxes to U.S. Customs & Border Protection (CBP). Consequently, the surety company provides the bond’s financial security, which means their role in the process is significant.
The U.S. Treasury Department determines if a surety company meets the financial standards needed to write U.S. Customs Bonds. Refer to the Department of the Treasury’s list of certified surety bond providers to view your surety information. You can also review the surety’s AM Best Rating for an overview of their financial strength, creditworthiness and ability to meet their obligations.
Other factors to consider when sizing up a surety are longevity, sound underwriting practices and customs bond expertise. These standards directly influence sustainability and stability. When a company fails to meet these standards or loses capacity your client may experience pricing fluctuations and additional underwriting scrutiny.
A best practice for long term stability is to place the bond with a proven surety through a qualified agent at the onset.
3. High-End Technology for Fast and Secure Transactions
In the rapid pace of modern trade, customs brokers need access to a fast and secure portal to issue customs bonds. These portals should simplify your procedures and offer seamless software integration via an electronic data interface. Additional features to look for include reporting capabilities that help you manage risk and costs for your clients.
4. Flexible and Responsive
In the fast pace of trade, the ability to transact business efficiently and quickly is key to your success.
Why Roanoke may be the Customs Bond Provider for You
Established in 1935, Roanoke was the first company in the United States to serve the needs of customs brokers and their import clients. We are a subsidiary of Munich Re, one of the top 10 commercial insurers and one of the top 100 largest companies worldwide. Our stability in the marketplace attracts top-tier industry talent, including certified customs specialists, accredited insurance specialists, and certified risk management professionals.
We are uniquely positioned to place customs bonds through American Alternative Insurance Corporation (AAIC). AAIC is rated A+, XV (Superior) by A.M. Best Company and has an insurer financial strength rating of AA- (Very Strong) from Standard & Poor’s. Roanoke has been the managing general underwriter for this Munich Re company since 2011.
Roanoke is committed to an ongoing focus on exceptional customer service that incorporates our values of professional, responsive, and competent client care. We call it the “Roanoke Way”. We strive for a collaborative partnership, and we have the know-how and infrastructure to help navigate the entire landscape of surety bond procurement, management, and claims handling. Our cutting-edge, in-house bond portal, FastBondTM provides a streamlined user experience and comprehensive platform to save you time and enable your company’s growth.
If you’re ready to make a change in bond provider or just getting started in the business and looking for the best fit in service, technology, and reliability, please get in touch!
Disclaimer: This information is provided as a public service and for discussion of the subject in general. It is not to be construed as legal advice. Readers are urged to seek professional or legal guidance from appropriate parties on all matters mentioned herein.