The Surety Association of Canada (SAC) is repeating its recommendation of digital bonds, issued at the start of the pandemic. At that time, the association advised the construction industry to expand its use of digital bonds for both the contracting phase and for performance and payment bonds.
Since the onset of the COVID-19 pandemic in Canada, there has been a need for dramatic shifts in the methods for the distribution of surety bonds, more specifically for construction projects and service/maintenance contracts.
To further assist the industry, he association has released their White Paper: Digital Bonds the Way of the Future – and the Present.
“Over the past number of months, SAC has been inundated with inquiries from both owners and contractors about how to obtain a digital bond,” states Steven D. Ness, president of the Surety Association of Canada. “And although we have stated our recommendation previously and provide comprehensive information on our website regarding e-bonding and digital bonds, we felt it necessary to create this white paper to provide a printable resource for various stakeholder groups”.
This white paper provides a detailed overview of digital bonds, including the requirement for such bonds to meet the three threshold criteria identified by SAC as essential to any legitimate digital bond:
- Integrity of Content – The assurances that the document received is the true document executed and the content has not been changed or altered.
- Secure Access – Restricting the access to the document to those authorized to view and/or download it.
- Verifiability / Enforceability – Assurances that the document was duly executed by the parties identified and that it is enforceable in law.
The document cautions users to be wary of commonly used substitutes for digital bonds such as scanned images which may be expedient, but do not meet these cornerstone criteria.
“To assist stakeholders in becoming more informed and knowledgeable about e-bonding and digital bonds, we also launched an FAQ section on our website of some of the most common questions that we have received since the start of the pandemic as we saw an increase in the number of requests for digital bonds,” said Sharon Clark-Koufis, director of operations, membership and stakeholder services.