Electronic Documents: Required Criteria

From a technical standpoint, the technology to create, record, execute and deliver electronic bonds is commercially available.  Regardless of the system used, it is important that the end-user trusts the process and is assured that the “document” received is as valid as any paper equivalent. In that regard it’s crucial that any electronic document received meet three threshold criteria: 

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. 

There are a number of commercially available software programs capable of creating reliable and enforceable electronic bonds that meet the criteria of the Surety Association of Canada, each having their own technical specifications and processes.

However, since technology evolves at a rapid pace, please note that SAC has discontinued the assessments of e-bonding platforms. It is also important to note that SAC does not endorse or provide approval for the use of any particular platform and suggests to users that with any platform used that the bond produced should meet the criteria as noted above.

E-Bonding Downloads and Links

SAC has compiled a number of documents and links related to e-bonding.

Reasons for E-bonding

In keeping with the growing trend toward automation, the construction and surety industries continue to explore the use of technology to enhance the level of service provided to their clients and to streamline their administrative processes. In the construction/surety world, the tendering phase lends itself very well to automation for several reasons:

  1. The time pressures involved in the bidding process where even one minute late can mean disqualification.  An automated approach where documents are delivered instantaneously can alleviate the last-minute pressures of a tender closing.
  2. The laws of tendering require strict, error-free compliance with the bid documents. Automated creation of the bid bond and other tender documents can significantly reduce the chance of errors which can lead to a bid being declared informal.
  3. The ease and economy of transmission: Not only is delivery easier, faster and “greener”, it is far less expensive and can reduce or eliminate mounting courier costs.

As is the case with any major change, the shift from paper to a digital environment is not without its challenges. What’s more, the unique nature of the surety product and process magnifies the impact of some of these issues and adds a few more. 

SAC’S Position

The Surety Association of Canada strongly supports the automation of the suretyship process and has decided to direct its energies and resources toward to promoting the responsible use of technology in bidding and bond issuance.  The Association see its role as a facilitator and advocate. 

SAC does not become involved as an active participant in the process of issuing surety bonds.  Again, the Association will not develop or even promote a proprietary software system for the creation, execution and delivery of surety bonds by member firms or any other stakeholders.