WHAT THE NATIONAL SURETY BOND LEADER OFFERS
Surety One, Inc. provides unmatched support of your contract surety bond needs. Our surety underwriting specialists and support staff are responsive and knowledgeable. These qualities facilitate expeditious review and response to your bid bond and performance bond / payment bond request.
Not all surety underwriters are equal. If you do not enjoy polite, clear communication and immediate attention to what is important to your enterprise, then you are collaborating with the WRONG UNDERWRITERS! Please give us the opportunity to demonstrate to you what real service is.
Performance Bonds & Payment Bonds
A surety performance bond protects a project owner from financial loss should the bonded contractor fail to fulfill the contract in accordance with its terms and conditions. Performance bonds are usually packaged with payment bonds, which assure that suppliers of labor and material will be paid. A one-year maintenance provision is also a customary guarantee of a performance bond.
Subdivision Performance Surety Bonds
A surety subdivision bond is required by a municipality when a developer of a subdivision must construct improvements, which will eventually become part of the public domain. Examples are gutters, curbs, sidewalks, and similar subdivision needs. These are often called completion bonds or site improvement bonds. The subdivision bond guarantees completion of improvements in accordance with the local governing body’s codes and requirements.
Commercial Contract Performance Bonds
Surety performance bonds can be written to support non-construction service and supply agreements. Internet technology, janitorial, security and transportation contracts are examples. Service contract performance bonds are underwritten differently because of the nature of particular service agreements, coverage for multiple locations, and differences in bidding practices. Surety One, Inc. has a broad appetite for these performance bond requests!
CONTRACT SURETY BONDING
Contract bonds provide superlative protection to project owners, laborers/sub-contractors and material suppliers. The contractors that are obligated to provide payment and performance bonds also benefit from the requirement. The contractor’s market position is enhanced by a surety company’s prequalification of his or her bondability. Simply, surety prequalification increases a contractor’s credibility. Project owners, financial institutions, materials suppliers and sub-contractors are more likely to extend preferred terms, lower interest rates and better pricing to contractors backed by strong corporate surety companies.
Competition between contractors, climatic changes, the volatility of material and equipment costs, the cyclical nature of most industries, the scarcity of a qualified and dependable labor pool, and the softening/hardening of credit terms are only a few of the many risks that the typical contractor must manage. A contract surety bond company should understand all of these factors and be prepared to offer performance bond capacity to the greatest extent possible while simultaneously serving as a “second set of eyes” for the contractor, limiting surety capacity where the contractor is overextending himself. A contract bond underwriter must effectively assess a contractor’s capital position, talent, experience and overall character then clearly communicate the surety’s position and the reasons for his or her decisions. Ideally, the relationship between a contractor and performance bond underwriter should be friendly, honest and respectful. A contractor must be told what he “needs” to hear, rather that what he “wants” to hear, and more specifically where the surety elects to decline the contractor’s request. If this is the type of relationship is what you seek, we are waiting to hear from you.
PUBLIC PRIVATE PARTNERSHIPS & SURETY BONDING
The American Subcontractors Association in collaboration with the National Association of Surety Bond Producers and the Surety and Fidelity Association of America, have produced the following compendium of P3 laws and current bonding requirements. As the popularity of public private partnerships grows, these laws and the performance bond requirements will change.
Public-Private Partnership Laws in the States
INTERNATIONAL CONTRACT SURETY / INTERNATIONAL PERFORMANCE BONDING
As a result of mass internet access and the growth of trustworthy multi-national banking institutions, contractors are more likely than ever to consider accepting projects outside of the United States. The United States is also a very attractive environment for foreign contractors wishing to accept work within the states and territories. International surety bond underwriting presents significant obstacles. For the U.S. contractor performing abroad the chief concerns are the extraordinary geographic footprint and the trustworthiness of the legal forums in which disputes may be settled. In the case of reverse flow international surety bonding, the drafting and perfection of international indemnity agreements, proper analysis of financial statements prepared to foreign standards, claims and collections issues, and the proper premium rating for bonds issued for less than full value of contracts represent significant deviations from standard U.S. surety underwriting practices. An international surety underwriter should possess superlative working knowledge of advance payment bonds (very popular across latin america), reverse flow bonding, cultural differences and business social protocols of the country in which work is performed, and the necessary language skills to maintain open lines of communication. Demand for international surety bonds, advance payment bonds and international financial guarantee will continue to grow, requiring surety companies to commit themselves to understanding and underwriting them.