Bond Verification Standards Initiative

BOND VERIFICATION STANDARDS

These are the details of a solution for item 8 (Bond Verification) described in SuretyScience's Surety Blueprint™. Currently, bond verification and status checks largely depend on direct outreach to insurers, often through phone calls, emails, or manual requests. This process is time‑consuming, inconsistent, and inefficient for obligees, principals, agents, and other stakeholders who need timely confirmation. Despite years of discussion and multiple industry initiatives, the surety market has yet to deliver a simple, standardized solution that enables universal, self‑service, real‑time bond validation.

Ongoing Efforts

Methodologies

Several approaches have been explored as potential universal solutions for verifying surety bonds. However, none have achieved widespread adoption or emerged as a de facto standard.

1) Insurer Self-Verification

Insurers with surety operations publish bond verification web pages that enable the public to confirm a bond’s validity and status through a simple bond number lookup. Verification instructions and URLs are also included with executed bond documents.

Challenges

While this is the simplest and most intuitive solution, it has never gained traction due to a lack of standardization, agreed‑upon processes, and data uniformity. Until recently, there has also been no clear industry champion for this approach.

2) Bond Authenticators

Most surety bonds cannot be executed using simple electronic signatures. As a result, surety‑specific bond authentication vendors maintain trusted networks of insurers, agencies, and principals, controlling the use of corporate seals, granting powers of attorney, and enforcing delegated authority.

Challenges

Widely utilized for bid bonds. If all surety bonds were bound through bond authenticators, verification by these vendors would represent an obvious and efficient solution. However, adoption for contract bonds has progressed slowly due to legal requirement and higher risk. Additionally, the process is not well suited for high‑volume, low‑risk commercial transactional bonds, where efficiency, automation, and speed are critical.

3) Consortiums

Several attempts have been made to establish a centralized source for bond verification, with mixed results, including initiatives such as National Multistate Licensing System (NMLS)® and RiskStream®. However, none achieved broad Surety industry consensus.

Challenges

Adoption has been hindered by underfunded initiatives and weak execution. Centralized database models struggle due to sureties’ reluctance to expose bond‑level data, and recent blockchain‑based approaches have added unnecessary complexity and misaligned with practical industry needs.

Universal Surety Bond Number (USBN)

Because insurers may use similar or overlapping bond numbering schemes, a standardized approach to identification is essential. The proposed Universal Bond Number (USBN) is composed of three elements. First is an identifier that specifies the verification method to be used. Second is the universal Legal Entity Identifier (LEI) of the insurer, bond authentication vendor, or consortium—a 20‑character code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO). Third is the bond number assigned by the insurer’s surety bond execution system. The USBN also streamlines insurer self‑verification by eliminating the need to specify the insurer when searching for a bond number.

Method

Identifier Specifying the Bond Verification Method

Provider

Global Identifier (LEI Number) of an Insurer, Vendor or Consortium

Bond Number

The Surety Bond Number Assigned By An Insurer During Issuance

USBN Example

84930FMNXYF84V5YF2

B2448910

The Insurer Self-Verification Method

SuretyScience strongly supports insurer‑based bond verification as the optimal industry solution.

The Process

Search

Enter a bond number on a uniform search web page published by Insurers, Agencies, Obligees, or Associations.

Construct

Search page consumes uniform data to resolve the appropriate bond verification endpoint and construct the correct redirect URL

Redirect

Seamlessly redirect the searcher to the appropriate verification website - insurer or third-party bond authenticators

View

Automatically retrieve and display key bond details, including summary and status, using a standardized pattern

Insurer Bond Self-Verification Benefits

The Simplest Approach

Self‑verification represents the path of least resistance, offering the simplest approach and the highest probability of success.

Bond Data Remains Decentralized

Eliminates the business, political, technical, and legal challenges associated with contributing bond information to a third-party centralized database.

Reusable Across The Industry

Easily implemented across all parties involved in the Surety process including Insurers, Agencies, Principals, Obligees, Associations and Vendors.

Verification Forwarding

In some cases, insurers may prefer that bonds endorsed by a third parties be validated by the bond authenticator. This approach includes the ability for insurers to transparently forward searchers to the appropriate verification destination.

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Insurer Bond Self-Verification Screenshots

Verification Hyperlinks on Bond Documents

Insurers include a direct hyperlink within bond document sets that enables users to access the public bond verification page.

Search

Insurers also publish a surety bond search page on their public websites, allowing users to enter a bond number and locate the corresponding bond.

View

Bond verification summary and status information are presented to users using a default, uniform formatting pattern.

Alternate View Incorporating Existing Standards

Bond verification summary and status information are presented to users using the ACORD ® Form 501 - Surety Report of Execution.

Search For Bonds On Any Website

Agencies, obligees, associations, and other third parties can publish public surety bond search pages that allow users to locate bonds by bond number. Provider selection (insurer or third‑party authenticator) is required until a Universal Surety Bond Number (USBN) is adopted.

Insurer Bond Self-Verification Conceptual Diagram

High Level Overview of Solution

SuretyScience has both the business and technical expertise to assist your Surety with implementing this solution.

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