Surety bonds have been used in various capacities for several decades or rather centuries now. The concept of surety is a rather ancient one but has successfully worked with modern commerce just as well.

Unlike insurance, surety bonds don’t really transfer risks. What they essentially do is that they make one party answerable in a contract. They act as an alternative avenue for recovery. Naturally, where else could they be better used than the healthcare industry, where the answering party could be responsible in matters of life and death.

Therefore, federal and state governments make it mandatory for certain healthcare providers to provide surety bonds, which actually works in their favor as well.

Here are a few ways health care organizations use and benefit from surety bonds.

They Save Tons

The only alternate to surety bonds healthcare organizations really have are LOCs, i.e., letters of credit. LOCs could be very expensive as compared to bonds. Furthermore, most companies offer premium rates, and healthcare organizations with an excellent financial track record can qualify for these premium rates and save tons.

This is an excellent saving opportunity for healthcare organizations as the surety bond could end up costing a lot less than a LOC issued by a bank at high-interest rates.

It Offers Them A Lot of Liquidity

Working capital and its adequate availability are very important in the healthcare industry. And surety bonds are excellent for financial records—they can very effectively safeguard liquidity on the balance sheets.

Alternatively, if the organization uses LOCs for, say, the workers' compensation plan, the terms of the LOC would freeze the credit line until its expiration. This results in limited funds for the organization and may affect day-to-day operations.

Surety bonds, on the other hand, don’t impose such restrictions and are issued very timely.

Makes Business Easier for Them

Businesses in the healthcare industry have a lot going on in the back end. Finances need to be the least of their worries as they try to tackle much more complex and rather crucial challenges. Surety bonds are fairly quickly secure, especially if you’re working with a reliable and experienced company.

If you’re in the healthcare industry and are looking for a quick and easy bond application process, we can help you out.

At SuretyEZ, our experienced agents know and understand each industry they’re dealing with inside out and can help you with surety bonds in Los Angeles.

Get in touch with us to learn more.