• He is able to stay ahead of events and changes in the surety marketplace that may pose opportunity or challenge for our customers.
• He has direct contracts with more than 20 surety companies. This allows Robert to handle bond needs for a wide variety of contractor types, sizes and needs.
• From International Bonds to Any State in the USA, Bob has the markets, and can handle, your bond needs.
   

Construction contracts were personally guaranteed until the early 1900s when the federal government began to require Performance and Payment Bonds on their contracts. Today, the Surety Bond is the standard instrument of protection for public and private construction buyers. A Surety Bond is too often considered a form of insurance when in reality it is a unique form of credit that guarantees pre-qualification, performance and credit-worthiness of a contractor, all at a cost much less than the prime and higher rates imposed by lending institutions. The Surety Bond is a legal agreement in which the Surety obligates itself to the construction buyer for the default of the contractor.

Why and how are surety bonds used?

Bonds are used in a variety of applications to guarantee delivery of services or product to the Obligee (the Owner or Buyer). Following thorough pre-qualification and risk analysis, the bond producer or agent recommends issuance of the Bond by the Surety (the Bond guarantee to the Obligee that the Principal promising the service or product will deliver under the terms of the contract).

The Surety Bond has become the most respected and economically competitive instrument of guarantee throughout the world. Letters of Credit and value-equivalent loans from lending institutions cost far more than a Surety Bond. The full prestige of the Surety Bond may be due more to the recognition by Obligees of the invaluable partnership that exists between the Agent, the Surety and the Contractor.

The form of bond used is determined by the type of transaction or contract.

• Performance Bonds guarantee the timely fulfillment of obligations of a written contract.
• Payment Bonds guarantee to the Owner the contractor will pay for labor and materials obligated in the fulfillment of the contract. The Payment Bond is also frequently called a Labor and Equipment Bond. A Payment Bond is nearly always provided with a Performance Bond.
• Supply Bonds guarantee the faithful performance or delivery of supplies or materials to the buyer.

How to obtain a bond:

In order to obtain your first Surety Bond you must first establish your credit-worthiness by providing your bonding agent with the information listed below. Once the trusting relationship between the Contractor, Agent and Surety is established, the process of obtaining subsequent bonds becomes a simplified matter of periodic review and renewal.

Key requirements to obtaining a surety bond are:

• Communications with your Agent must be open and honest on all matters. Your Agent objectively evaluates risks and provides critical advice based on broad market familiarity. We are your most objective critic and most ardent supporter and member of your team.
• A history of your company, with your work history, organizational chart, and key-employee resumes should be prepared for the best possible representation.
• A Corporate or Strategic Plan detailing market objectives and targeted company growth. This plan should also include a Continuity Plan to assure the Surety of continuing successful management control of current and future operations.
• Financial Statements using standard accounting methods and prepared by a certified public accountant, or acceptable alternative.
• Bank Relationships and Credit References supported by testimonial letters.