‘Way of the future’: Surety association encourages shift to digital bonds
By On-Site Staff
Construction Financing
The abrupt shift to new digital tools, bonds included, has left some of the industry playing catch-up
From rethinking paper invoices to social distancing during toolbox talks, the COVID-19 pandemic has turned a multitude of construction industry norms on their heads.
The standard hard-copy procedure for distributing surety bonds is no different, and earlier this month, Surety Association of Canada reiterated its recommendation for the wide-scale adoption of digital bonds.
“The previous routine task of creating, executing, and delivering hard copy multi-party documents in a physically distanced world has become maddeningly complicated,” the SAC said in a white paper released Oct. 6.
The association advised the construction industry this spring to expand its use of digital bonds for both the contracting phase and for performance and payment bonds. The uptake among owners has been high, the SAC noted, and post-COVID, there may be no going back to the traditional paper approach.
Still the abrupt shift has led to considerable confusion and skepticism for some in construction.
The new SAC white paper breaks down what the industry should be looking for — and be wary of — in a digital bond. Among other areas, it highlights the three essential criteria for a legitimate electronic bond and spells out the first steps needed to go digital.
You can read the full white paper here.
