“The information gathering for these documents is extensive,” Marchetti says. “Sometimes we get mailed back the wet copy and it’s executed wrong. That back-and-forth process takes a long time, especially when we’re talking about the mail.”
Marchetti says that with e-signatures, however, the process can take as little as 15 minutes from start to finish.
Robert Lavitt, Vice President and Director of Surety Claims for Argo Surety, believes e-signatures are as safe as the usual process, if not more secure.
Argo Surety sees instances of attempted forgery once or twice a year. And while notaries public are meant to deter fraud, they can be unreliable, especially in the case of smaller construction companies or those where notaries are employed by the indemnitors.
But the biggest benefit e-signatures provide is just how convenient they are.
“Our clients are enjoying the ease of this process,” says Marchetti. “And from a logistical perspective, it’s easier to maintain the file and the documentation. Utilizing an online tool just makes everybody’s life a little easier.”
Turning e-signature capability into new business
Financial institutions and businesses are increasingly turning to electronic signature technology to sign contracts that previously required postage or face-to-face meetings to complete.
Making the switch to e-signatures is not as simple as it may seem, however. There are security and legal concerns to address before using them to sign important contracts. The more money is at stake, the more carefully companies should consider these factors.
“The ability to get signatures from indemnitors around the world without mailing documents internationally can open up new opportunities,” Lavitt says, “but it’s also an area for caution.”
The challenge is that laws regulating the use of e-signatures are complex and vary between states and countries. In the U.S., laws like the E-Sign Act and the Uniform Electronic Transactions Act (UETA) have validated e-signatures and provide a framework for determining their enforceability.
But when indemnity agreements are signed outside the U.S., Argo Surety must consult local counsel to determine whether e-signatures are recognized as they would be in the U.S. Companies who can navigate these legal concerns may find a competitive advantage.
Although regulatory discrepancies, and sometimes tradition, prevent e-signatures from being used to complete every indemnity agreement, Marchetti and Lavitt think e‑signatures’ ease of use will eventually make them the industry standard.
“I see more competitors using e-signatures, so it does seem to be trending in that direction,” Marchetti says. “But it will ultimately fall on how enforceable it ends up being.”
“If somebody in the industry has a huge loss associated with an e-signature, the tide may turn again,” says Lavitt. “But if it’s as reliable as it appears to be, I don’t think we’re going back to the old way.”
Learn more about Argo Surety.
