Bonding for Contractors. Barrie Construction Association September 17, 2015

Size: px
Start display at page:

Download "Bonding for Contractors. Barrie Construction Association September 17, 2015"

Transcription

1 Bonding for Contractors Barrie Construction Association September 17,

2 Topics What do bonds do? How does a bond benefit you? How do you get a bond? What are the information requirements? What is the bond company looking for? How do I maximize my chances of being approved? Subguard What is it, what is it not? 2

3 What is a bond and what does a bond do? 3

4 The Short Answer Contract surety bonds are used in lieu of contractor cash or letters of credit: At time of tender, guarantees contractor will sign contract and surety will issue final bonds Guarantees performance of contract once awarded by owner Guarantee payment to subtrades and suppliers once work starts Surety bonding is not insurance! 4

5 Bond - Three Party Agreement REINSURERS 1) SURETY BROKER 2) OWNER (OBLIGEE) 3) CONTRACTOR (PRINCIPAL) 5

6 Surety vs. Insurance INSURANCE 2-Party Contract Demand Instrument Cancellable Premiums Based on Losses Transfers Insured s Risk No Reimbursement by Insured SURETY 3-Party Contract Default Instrument Not Cancellable Fee for Services Transfer Obligee s Risk Principal indemnifies Surety against losses 6

7 Bid Bond The bond guarantees the price spread between the lowest and 2nd lowest bidder if the contractor is awarded the job and doesn t enter into a contract with the owner. Capped at bond penalty (e.g. 10%) If contract is awarded and contractor doesn t sign, can pay the bid spread and walk away. 7

8 Consent of surety Also called Agreement to Bond. Surety commits to issue a performance and a labour & material payment bond provided the contractor enters into the contract. If Contractor is awarded the job and signs the contract, the surety can not refuse to issue the Performance and Labour & Material Payments bonds. 8

9 Performance Bond Protects the obligee by guaranteeing that, in the event of the contractor s default, the contractor s obligations under the contract will be fulfilled. Whatever the contract says, the bond guarantees. E.g. 2 year warranty period, design, etc. 9

10 Labour & Material Payment Bond Covers outstanding payments to subcontractors, labourers, and material suppliers who had a direct contract with the principal. If you are a subtrade and want to be protected by the GC s payment bond, speak with the owner/consultant and ask that bonding be made a requirement (especially for public projects). 10

11 11 How does a bond benefit you?

12 Benefits of bonds Qualify for work where bonds required - hospitals, schools, governments, others. Indication of solvency and capability to owners. Use surety s money frees up line of credit and cash used for job security. Claims process in event of a dispute, not on-demand like a letter of credit. Protects the subtrades. 12

13 Benefits of bonds (Cont.) Leverages working capital of the firm. E.g. To use a letter of credit from the bank, you must provide at least $1 of collateral for each $1 credit. With a surety facility, the bond facility can often be leveraged 10x working capital (or even more depending on circumstances), allowing the company to bid more projects. An underwriter would need to review the usual underwriting information to advise on potential limits (see Information Requirements). 13

14 14 How do you get a bond?

15 Applying for bonding Bonding is arranged through your insurance broker or agent. The Guarantee does not require a contract for your broker to conduct business with us. Ask your broker to send you the forms to apply for bonding. Typically takes 2-3 weeks, though can be done in days if the application is straightforward. 15

16 16 Information requirements?

17 Information requirements Company s previous three years financial statements Related company statements Copy of bank terms and conditions letter Work on hand schedule 17

18 Information requirements Most recent quarter-end statements Aged listings of receivables and payables Summary of Insurance Coverages Contractor s Questionnaire Personal Financial Statement (each shareholder) 18

19 What is the bond company looking for? 19

20 3 C s of Underwriting Character Capital Capacity 20

21 Underwriting - Character Integrity Reputation References Business record Trade payment record Contract disputes and litigation (frequency) 21

22 Underwriting - Capital Equity, Working Capital, Debt Load Profitability Non-Construction Investments Shareholder / Related Company Advances Contingent Liabilities 22

23 Underwriting - Capacity History of completing similar jobs of a similar size Completing on time, per specs, without disputes Type, Size and Number of Jobs Expertise of Owners, and Key Staff 23

24 Underwriting - Capacity Geographic area of operations Controls and Reporting Access to Labour, Materials and Equipment Historical working relationships with Owners, Consultants, Subs and Suppliers 24

25 How do I maximize the chance my application will be approved? 25

26 Getting Approved Apply early, before you need the bond. Statements prepared by a CPA on a Review Engagement basis. Leave profits in the company to boost working capital and net worth. In-house accounting package kept up to date. Job costing system. 26

27 Subguard What is it, and what is it not? 27

28 Subguard What is it? Subguard is marketed as an alternative product to surety bonds. Subguard is an insurance policy, not a bond, that protects the general contractor from the failure of a subtrade. If a subtrade fails, the insurance policy pays the GC for costs of the subtrade failure. Only the largest contractors in Canada can qualify for subguard. 28

29 Subguard What is it not? Subguard is not a product that provides direct protection to the owner or subtrades. The subtrades cannot make a claim against Subguard. In only very limited circumstances (i.e. GC goes bankrupt) can the owner make a claim. Whereas Subguard protects the GC, surety bonds protect the owner and the subtrades. 29

30 30 The Guarantee - Who we are

31 THE GUARANTEE - SURETY Canadian company, family owned, serving the Canadian and US construction industry Founded in 1872, the first Surety in North America 2nd largest Surety in Canada, 10th largest Surety in North America Clients include many small and medium sized family businesses like yours, up to some of the largest construction companies in Canada, and every size in between. 31

32 Considerations When Choosing a Surety Company Substantial Canadian staff dedicated to serving clients? Surety offices across Canada? Surety establish and maintain a relationship by meeting with their clients each year? Have they been in the Canadian marketplace long? Provide cross-border surety support in-house? In-house claims staff in the event there is an issue? Experienced claims staff include professional engineers, accountants, and lawyers who seek to understand the situation? 32

33 THANK YOU theguarantee.com 33

34 The Guarantee Company of North America. All rights reserved.

Surety Bonding Solutions for Risk Management GFOABC May 31, 2012, Kelowna

Surety Bonding Solutions for Risk Management GFOABC May 31, 2012, Kelowna Surety Bonding Solutions for Risk Management GFOABC May 31, 2012, Kelowna Introduction: Surety Association of Canada National & Regional Presence Your bonding resource Membership: Surety (Bonding) Companies

More information

Surety Bond Tutorial by Lori Kieswetter

Surety Bond Tutorial by Lori Kieswetter Contract Surety Bonds Defined Surety Bond Tutorial by Lori Kieswetter A bond issued by a surety bond company on behalf of a contractor, guaranteeing that the contractor will complete a contract as per

More information

A Workshop Module of the Model Contractor Development Program (MCDP) The Surety & Fidelity Association of America

A Workshop Module of the Model Contractor Development Program (MCDP) The Surety & Fidelity Association of America What You Need To Know For Contract Surety Support A Workshop Module of the Model Contractor Development Program (MCDP) The Surety & Fidelity Association of America Barriers to Emerging Contractors Entry

More information

The Mysterious World of Surety Bonding

The Mysterious World of Surety Bonding The Mysterious World of Surety Bonding The Mysterious World of Surety Bonding Robin Federici, CPCU, AAI, ARM, AINS, AIS, CPIW PO BOX 781 NORTH KINGSTOWN, RI 02852 Phone: 401-294-3557 Fax: 401-294-3557

More information

Construction Surety Bonds

Construction Surety Bonds Construction Surety Bonds September 17, 2014 Presented by: Walt Caldwell Walt.Caldwell@willis.com What is a Surety Bond An instrument where one party (Surety) guarantees the obligations of a second party

More information

DELMARVA SURETY FAX (410)561-3727 Surety Bond Specialists

DELMARVA SURETY FAX (410)561-3727 Surety Bond Specialists DELMARVA SURETY FAX (410)561-3727 Surety Bond Specialists Date Submitted By BOND REQUEST FORM TO ENSURE TIMELY DELIVERY AND OUR ABILITY TO MAIL YOUR BOND, PLEASE SUBMIT YOUR BOND REQUESTS AS EARLY AS POSSIBLE.

More information

Surety Bonds &Construction Risk: SAC s Enhanced Process Performance Bond

Surety Bonds &Construction Risk: SAC s Enhanced Process Performance Bond Public Construction Council of BC Vancouver November 15, 2013 VRCA Surety Bonds &Construction Risk: SAC s Enhanced Process Performance Bond Surety Companies The Surety Industry o SAC members write 95%

More information

Making Sure the Job Gets Done: Surety Bonds and the Underwriting Process

Making Sure the Job Gets Done: Surety Bonds and the Underwriting Process Making Sure the Job Gets Done: Surety Bonds and the Underwriting Process Joanne S. Brooks, Esq. Vice President and Counsel February 18, 2014 Presentation for the North Carolina Purchase and Contract Study

More information

Construction Insurance and Contract Bonds. Ted Murray CMW Insurance Services Ltd.

Construction Insurance and Contract Bonds. Ted Murray CMW Insurance Services Ltd. Construction Insurance and Contract Bonds Ted Murray CMW Insurance Services Ltd. 1 Outline of Topics MMCD 2009 Insurance Requirements Construction Insurance Contract Bonding 2 MMCD - 2009 3 MMCD - 2009

More information

MITIGATE RISKS AND MAXIMIZE RESOURCES WITH SUBCONTRACTOR PREQUALIFICATION

MITIGATE RISKS AND MAXIMIZE RESOURCES WITH SUBCONTRACTOR PREQUALIFICATION MITIGATE RISKS AND MAXIMIZE RESOURCES WITH SUBCONTRACTOR PREQUALIFICATION Article by: Christopher E. Hartle, CPA Senior Manager / Team Leader Construction Client Service Team Mitigate Risks and Maximize

More information

INDEX. bonded contract, 289 insureds, 243. misrepresentation, 291 obtaining, 242

INDEX. bonded contract, 289 insureds, 243. misrepresentation, 291 obtaining, 242 INDEX B non-conforming tender, 284 boiler and machinery insurance, performance bond 241 default by the obligee, 288 coverage, 243 failure to notify, 289 definition of the accident, 245 material variation

More information

a guide to construction surety bonds

a guide to construction surety bonds Standard construction document CCDC 22 2002 a guide to construction surety bonds Canadian Construction Documents Committee TABLE OF CONTENTS INTRODUCTION 1. WHAT IS SURETYSHIP? 1.1 HISTORY 1.2 WHAT IS

More information

CONTRACT BOND SUBMISSION

CONTRACT BOND SUBMISSION CONTRACT BOND SUBMISSION 1030 17th Avenue South Nashville, TN 37212 Contract & Commercial Surety Bonds (615) 321-9700 Toll Free: 1-877-992-6637 Fax: (615) 321-9702 Our obligation as Surety is to analyze

More information

CONSTRUCTION RISK MANAGEMENT. TABLE of CONTENTS:

CONSTRUCTION RISK MANAGEMENT. TABLE of CONTENTS: CONSTRUCTION RISK MANAGEMENT TABLE of CONTENTS: 1. Introduction 2 2. Project Start Up Risk Exposure Analysis 3 3. Insurance 5 4. Additional Advice 8 5. Bonding 9 6. Subcontractor Default Insurance 11 1

More information

Contractor s Bond Questionnaire

Contractor s Bond Questionnaire We appreciate the opportunity to be the broker of record in providing surety bond credit to your company. The purpose of this questionnaire is to assist us, and the designated surety company, in evaluating

More information

Surety Bond Associates. Understanding Contract Surety Bonding: An Orientation for Veteran Owned Small Contractors

Surety Bond Associates. Understanding Contract Surety Bonding: An Orientation for Veteran Owned Small Contractors Surety Bond Associates Understanding Contract Surety Bonding: An Orientation for Veteran Owned Small Contractors Contract Surety Bonds Bid Bond Performance Bond Payment Bond Who Requires Bonds? Public

More information

Auditor General Procurement Processes Review - Bid Bonds/Performance Bonds

Auditor General Procurement Processes Review - Bid Bonds/Performance Bonds STAFF REPORT June 22, 2005 To: From: Subject: Administration Committee Deputy City Manager and Chief Financial Officer Auditor General Procurement Processes Review - Bid Bonds/Performance Bonds Purpose:

More information

U.S. Small Business Administration Surety Bond Guarantee Program. Opening the Door to Bonding

U.S. Small Business Administration Surety Bond Guarantee Program. Opening the Door to Bonding U.S. Small Business Administration Surety Bond Guarantee Program Opening the Door to Bonding What Is a Surety Bond? A three party written agreement between the surety, the contractor and the project owner.

More information

INTRODUCTION TO BID/PERFORMANCE AND PAYMENT BONDS AND THE SBA BOND GUARANTEE PROGRAM:

INTRODUCTION TO BID/PERFORMANCE AND PAYMENT BONDS AND THE SBA BOND GUARANTEE PROGRAM: INTRODUCTION TO BID/PERFORMANCE AND PAYMENT BONDS AND THE SBA BOND GUARANTEE PROGRAM: U.S. Small Business Administration Phoenix SBA Office March 21, 2013 Mark S. Hewitt, CPCU, AFSB, AIM Western National

More information

Summary. Essential Information in this Chapter

Summary. Essential Information in this Chapter Chapter 24. Security Summary This chapter identifies the various forms of security that may be required as part of a procurement, when they are required, what form they must be in, and when they may be

More information

THE USE OF CONSTRUCTION BONDS IN THE USA FLANDERS INVESTMENT & TRADE MARKET SURVEY

THE USE OF CONSTRUCTION BONDS IN THE USA FLANDERS INVESTMENT & TRADE MARKET SURVEY THE USE OF CONSTRUCTION BONDS IN THE USA FLANDERS INVESTMENT & TRADE MARKET SURVEY In the United States, the use of construction bonds is common in construction projects. It is issued by an insurance company

More information

ALAMO SURETY BONDS CONTRACT SURETY BONDS BID * PAYMENT * PERFORMANCE

ALAMO SURETY BONDS CONTRACT SURETY BONDS BID * PAYMENT * PERFORMANCE ALAMO SURETY BONDS CONTRACT SURETY BONDS BID * PAYMENT * PERFORMANCE 2361 Austin Hwy San Antonio, TX 78218 Phone (210) 930-5550 Fax (210) 930-3255 www.alamobonds.com 1 1. WHAT IS A SURETY BOND? FREQUENTLY

More information

PERFORMANCE BONDS AND LABOUR AND MATERIAL PAYMENT BONDS: WHAT THE CONSTRUCTION INDUSTRY SHOULD KNOW

PERFORMANCE BONDS AND LABOUR AND MATERIAL PAYMENT BONDS: WHAT THE CONSTRUCTION INDUSTRY SHOULD KNOW PERFORMANCE BONDS AND LABOUR AND MATERIAL PAYMENT BONDS: WHAT THE CONSTRUCTION INDUSTRY SHOULD KNOW Deborah E. Palter, B.A., LL.B., J.D. What is a Bond? A bond is a three party written agreement. The three

More information

Construction Risk Management Presentation. Government of Yukon & Yukon Construction Sector February 24, 2016 Surety Bonds &Construction Risk

Construction Risk Management Presentation. Government of Yukon & Yukon Construction Sector February 24, 2016 Surety Bonds &Construction Risk Construction Risk Management Presentation Government of Yukon & Yukon Construction Sector February 24, 2016 Surety Bonds &Construction Risk He that is surety for a stranger shall smart for it: he that

More information

Contract Management - Insurance, Indemnity & Bonds

Contract Management - Insurance, Indemnity & Bonds Contract Management - Insurance, Indemnity & Bonds March 2, 2011 Jim Gilley, Sr. VP, Energy & Environmental (865) 392-5711 (direct) (865) 607-5663 jim.gilley@wellsfargo.com Wells Fargo Insurance Services

More information

APPLYING FOR A BOND FACILITY. The Contractor Application Process

APPLYING FOR A BOND FACILITY. The Contractor Application Process APPLYING FOR A BOND FACILITY The Contractor Application Process Welcome to the Surety Learning Module: APPLYING FOR A BOND FACILITY Learning Objective: This module will assist you, the Project Owner, to

More information

Surety Bond Guarantee Program

Surety Bond Guarantee Program Contractor Bond Seminar Surety Bond Guarantee Program 1 The Basics of Bonding Contract Bonds Bond Agents Pre qualification What Bond Underwriters Look For Banking, Credit & Bond Costs SBA Bond Guarantee

More information

Presentation to Insurance Regulatory. August 4, 2014

Presentation to Insurance Regulatory. August 4, 2014 A Primer on Surety Bonds Presentation to Insurance Regulatory Examiners Society August 4, 2014 State Legislative Issues: Surety Bonds Lenore S. Marema Vice President Government Affairs The Surety & Fidelity

More information

CONSTRUCTIVE V IEW SURETY BONDS HOW THEY CAN AID THE CASH FLOW OF YOUR BUSINESS

CONSTRUCTIVE V IEW SURETY BONDS HOW THEY CAN AID THE CASH FLOW OF YOUR BUSINESS CONSTRUCTIVE V IEW JLT S CONSTRUCTION INSURANCE WHITE PAPER JULY 2014 SURETY BONDS HOW THEY CAN AID THE CASH FLOW OF YOUR BUSINESS Overview Surety Bonds offer an alternative to bank guarantees for the

More information

Surety Bonds. SuretyBonds.com GUARANTEED PERFORMANCE, NATIONWIDE. The Consumer s Guide to

Surety Bonds. SuretyBonds.com GUARANTEED PERFORMANCE, NATIONWIDE. The Consumer s Guide to The Consumer s Guide to Surety Bonds Surety bonds are an incredibly important tool for managing and mitigating risk in the business world. They are an essential and often mandatory production element for

More information

Surety 101. An Introduction to the Surety Industry

Surety 101. An Introduction to the Surety Industry Surety 101 An Introduction to the Surety Industry Surety bonds have played a major role in Canada s growth since they emerged as a modern North American industry in the late 19th and early 20th centuries.

More information

Performance and Payment Bonds

Performance and Payment Bonds Performance and Payment Bonds Submission Requirements 1) Request for Performance and Payment Bonds. (Forms attached for your convenience, please return only with a Performance and or Payment Bond Request.

More information

SUBMISSION CHECKLIST CONTRACT BONDS

SUBMISSION CHECKLIST CONTRACT BONDS 4446 State Route 42, Ste. B Monticello, NY 12701 T (845) 791-6700 / F (845) 794-5333 www.hudsonunderwriters.com SUBMISSION CHECKLIST CONTRACT BONDS We appreciate this opportunity to earn your business.

More information

Construction Surety Bonding:

Construction Surety Bonding: Construction Surety Bonding: What is a Bond and How do I Structure to Bond Routinely? Presented to Pikes Peak NCMA May 15 th, 2014 Six & Geving Insurance, Inc. Largest Local 3,000+ Business Clients 28%

More information

U.S. Small Business Administration Surety Bond Guarantee Program. Opening the Door to Bonding

U.S. Small Business Administration Surety Bond Guarantee Program. Opening the Door to Bonding U.S. Small Business Administration Surety Bond Guarantee Program Opening the Door to Bonding What Is a Surety Bond? A three party written agreement between the surety, the contractor and the project owner.

More information

Surety bonds are almost always written by insurance companies that are licensed by state insurance departments, but they are not like typical

Surety bonds are almost always written by insurance companies that are licensed by state insurance departments, but they are not like typical A surety bond is a promise to be liable for the debt, default, or failure of another. A surety bond is a three-party contract by which one party (surety) guarantees the performance of a second party (principal)

More information

CONTRACT BONDS * Bid * Payment * Performance

CONTRACT BONDS * Bid * Payment * Performance ALAMO SURETY BONDS Phone (210) 930-5550 2361 Austin Hwy Fax (210) 930-3255 San Antonio, TX 78218 bondinfo@alamobonds.com To qualify for bonding credit, the surety company underwriter will need to determine

More information

Understanding and Maximizing Surety Credit and Bonding Capacity

Understanding and Maximizing Surety Credit and Bonding Capacity Breakout Session September 17, 2015 Understanding and Maximizing Surety Credit and Bonding Capacity Presented By: Jeffrey P. Deldin, CPCU, AFSB Bruen Deldin Didio Associates, Inc. James W. Miller, CPA

More information

Contractor & Subcontractor Default Insurance. Prepared By Simon J. Fenn, CIP Fenn & Fenn Insurance Practice Inc. August 10, 2006

Contractor & Subcontractor Default Insurance. Prepared By Simon J. Fenn, CIP Fenn & Fenn Insurance Practice Inc. August 10, 2006 Contractor & Subcontractor Default Insurance Prepared By Simon J. Fenn, CIP Fenn & Fenn Insurance Practice Inc. August 10, 2006 Terms of Reference For brevity we have included the following abbreviations:

More information

How to Obtain. Surety Bonds. Headquarters: 39 North Duke Street / P.O. Box 1728 / Lancaster, PA 17608 www.murrayins.

How to Obtain. Surety Bonds. Headquarters: 39 North Duke Street / P.O. Box 1728 / Lancaster, PA 17608 www.murrayins. How to Obtain Headquarters: 39 North Duke Street / P.O. Box 1728 / Lancaster, PA 17608 www.murrayins.com 717-397-9600 In 1930, Paul G. Murray arranged the bond for the Veterans Memorial Bridge, the world

More information

5 6 Surety bonds are used for public works contracts to transfer risk and fulfill statutory requirements. Since 1893, the federal government has required contractors to obtain bonds for federal public

More information

The Surety Safeguard for Third Party Vendor Contracts. How Surety Bonds Protect Taxpayer Dollars

The Surety Safeguard for Third Party Vendor Contracts. How Surety Bonds Protect Taxpayer Dollars The Surety Safeguard for Third Party Vendor Contracts How Surety Bonds Protect Taxpayer Dollars The Surety Safeguard for Third Party Vendor Contracts How Surety Bonds Protect Taxpayer Dollars The Surety

More information

TWELFTH ANNUAL SOUTHERN SURETY AND FIDELITY CLAIMS CONFERENCE

TWELFTH ANNUAL SOUTHERN SURETY AND FIDELITY CLAIMS CONFERENCE TWELFTH ANNUAL SOUTHERN SURETY AND FIDELITY CLAIMS CONFERENCE CONTRACTOR DEFAULT INSURANCE v. SURETY BONDS ARE TRADITIONAL CONTRACT BONDS OBSOLETE? PRESENTED BY: ELISE M. FROHSIN, ESQUIRE STARNES & ATCHISON,

More information

Randy Murray September 10, 2015

Randy Murray September 10, 2015 Randy Murray September 10, 2015 Definition Compare Insurance and Surety Types of Surety Bonds Collateral Reserving 2 Surety Bond is an agreement, issued by an insurance company, that promises to pay one

More information

How to Obtain Surety Bonds

How to Obtain Surety Bonds How to Obtain Surety Bonds An Introduction to Contract Surety Bonding for Contractors How to Obtain Surety Bonds: An introduction to contract surety bonding for contractors Federal, state, and local governments

More information

CONTRACT BOND SUBMISSION CHECKLIST

CONTRACT BOND SUBMISSION CHECKLIST CONTRACT BOND SUBMISSION CHECKLIST Contractors uestionnaire Bond equest orm Copy of contract (if final bond request) Past three years CPA Prepared fiscal year end statements Interim financial statement

More information

Know Surety Bonds.com Contractor s Questionnaire

Know Surety Bonds.com Contractor s Questionnaire Thank you for the opportunity to allow us to secure a bonding line for your company. In order for us to better evaluate your company and obtain the best possible bond program, please fill out the form

More information

Subguard Benefits and Insights

Subguard Benefits and Insights NORTHERN ALBERTA RISK & INSURANCE MANAGEMENT SOCIETY PRESENTS Subguard Benefits and Insights About Zurich Zurich Financial Services Through our offices in more than 50 countries, approximately 60,000 Zurich

More information

Contract Security. Requirements. Forms of Contract Security 6.8. The purpose of contract security is to guarantee that the contractor will:

Contract Security. Requirements. Forms of Contract Security 6.8. The purpose of contract security is to guarantee that the contractor will: 6.8 Contract Security The purpose of contract security is to guarantee that the contractor will: perform and complete the work according to the contract requirements discharge lawful obligations and satisfy

More information

Contract surety bonds

Contract surety bonds Contract surety bonds Financial security guaranteed to get the job done. Solid partnerships Customized solutions Insurance that s right for you. No matter what you drive or where you live, from one of

More information

PURPOSE AND TYPES OF SURETY BONDS

PURPOSE AND TYPES OF SURETY BONDS PURPOSE AND TYPES OF SURETY BONDS What is the Surety's Job? To protect public and private interests against financial loss resulting from a company or individual's bankruptcy or failure to perform a contracted

More information

Surety Bonds What s New in the World of Construction Security I Construction Risk

Surety Bonds What s New in the World of Construction Security I Construction Risk Surety Bonds What s New in the World of I Construction Risk 10:45 11:30 1 Then You Shall be his Surety William Shakespeare Merchant of Venice Construction Risk 2015 Construction Risk = Risk of Contractor

More information

A Primer on Surety Bonds

A Primer on Surety Bonds A Primer on Surety Bonds Mark J. Browne, Ph.D. Robert Clements Distinguished Chair School of Risk Management Tobin College of Business St. John s University New York, New York A Primer on Surety Bonds

More information

Contract Review: Key Terms That May Put Your Company At Risk

Contract Review: Key Terms That May Put Your Company At Risk Contract Review: Key Terms That May Put Your Company At Risk Grady Dotson, CPCU, Vice-President of CSDZ, Utah Will Kieffer, AFSB, Surety Account Executive, CSDZ, Utah Surety Bond Review Three Party Agreement:

More information

THE BASICS. Michael A. Mason, CIC, ARM

THE BASICS. Michael A. Mason, CIC, ARM THE BASICS Michael A. Mason, CIC, ARM This insurance is designed to protect your business in the event owned property is lost, stolen or damaged. Different policies protect against different risks and

More information

Surety Bonds &Construction Risk

Surety Bonds &Construction Risk What s New in Surety Presentation Government of Yukon & Yukon Construction Sector February 24, 2016 Surety Bonds &Construction Risk Inscription found in the Temple of Apollo in Delphi Greece 03 March 2016

More information

YOUR FIRST BOND. An introduction to corporate surety bonding for contractors considering projects that require bid, performance and payment bonds.

YOUR FIRST BOND. An introduction to corporate surety bonding for contractors considering projects that require bid, performance and payment bonds. YOUR FIRST BOND An introduction to corporate surety bonding for contractors considering projects that require bid, performance and payment bonds. Published by The Surety Association of America and the

More information

THE CORPORATION OF THE CITY OF BURLINGTON D1 - AGREEMENT

THE CORPORATION OF THE CITY OF BURLINGTON D1 - AGREEMENT Agreement 2006 Page 1 THE CORPORATION OF THE CITY OF BURLINGTON D1 - AGREEMENT THIS AGREEMENT made in triplicate this day of 20 THE CORPORATION OF THE CITY OF BURLINGTON (hereinafter called "the City")

More information

The Canadian Surety Industry, Traditional Construction Bonding And Contractor Default Insurance (Subguard )

The Canadian Surety Industry, Traditional Construction Bonding And Contractor Default Insurance (Subguard ) The Canadian Surety Industry, Traditional Construction Bonding And Contractor Default Insurance (Subguard ) The Industry in Brief Much has been written on the problems facing contractors in Canada with

More information

INSTRUCTIONS AND APPLICATION FOR CONTRACT BONDING

INSTRUCTIONS AND APPLICATION FOR CONTRACT BONDING Melwain Enterprises, Inc. 181 South Franklyn Avenue - Suite 603 Valley Stream, New York 11581 (516) 295-6081 Fax: (516) 569-1516 Email Address: info@melwainbonds.com INSTRUCTIONS AND APPLICATION FOR CONTRACT

More information

Chase Surety Bond Facility Application Form

Chase Surety Bond Facility Application Form Chase Surety Bond Facility Application Form Supporting Information Required Information required Details of information required Attached Last three (3) years The last three (3) years financial statements

More information

Contractor s Questionnaire

Contractor s Questionnaire Contractor s Questionnaire Along with this submission please include all of the following (incomplete submissions may result in a delayed response): Last three fiscal year end statements of applicant and

More information

INDEMNITIES. Guaranty Agreement and Bond Information

INDEMNITIES. Guaranty Agreement and Bond Information STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE BOARD FOR LICENSING CONTRACTORS Mailing Address: 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37243-1150 TELEPHONE: 800-544-7693 OR (615) 741-8307

More information

Performance, Payment and Contract Bonds The Fastest Bond Program up to $500,000

Performance, Payment and Contract Bonds The Fastest Bond Program up to $500,000 Performance, Payment and Contract Bonds The Fastest Bond Program up to $500,000 Bond Rates for SureQuick Express: 2.5% Minimum Premium $250.00 $100,000 Bonds and under: Complete: (Follow page numbers on

More information

GENERAL CONTRACTOR PRE-QUALIFICATION 2014 - FOR PERIOD ENDING DEC 2017

GENERAL CONTRACTOR PRE-QUALIFICATION 2014 - FOR PERIOD ENDING DEC 2017 APPLICATION for PRE QUALIFICATION GENERAL CONSTRUCTION CONTRACTORS Construction Projects up to $3,000,000 Prequalified General Contractors will be invited to submit bids for various Renovation and Construction

More information

BONDS C&L Preview. Introduction. What is a bond? Types of bonds. On default bond. On demand bond

BONDS C&L Preview. Introduction. What is a bond? Types of bonds. On default bond. On demand bond BONDS C&L Preview Third Edition September 2012 Introduction There are three collateral arrangements that can be used to secure the performance of the obligations undertaken by you. This issue focuses on

More information

How to Obtain. Surety Bonds

How to Obtain. Surety Bonds How to Obtain Surety Bonds An introduction to contract surety bonding for contractors. Federal, state, and local governments require surety bonds in order to manage risk on construction projects and protect

More information

BLUEPRINT SURETY MARKET FORECAST CONSTRUCTION PRACTICE HAS THE STORM BLOWN OUT TO SEA? OR IS IT JUST SLOW TO DEVELOP?

BLUEPRINT SURETY MARKET FORECAST CONSTRUCTION PRACTICE HAS THE STORM BLOWN OUT TO SEA? OR IS IT JUST SLOW TO DEVELOP? CONSTRUCTION PRACTICE BLUEPRINT September 2011 www.willis.com SURETY MARKET FORECAST HAS THE STORM BLOWN OUT TO SEA? OR IS IT JUST SLOW TO DEVELOP? The Surety and Fidelity Association of America (SFAA)

More information

Contractors Surety Briefing for 2011. Presented By: Nick J. Rutigliano, President

Contractors Surety Briefing for 2011. Presented By: Nick J. Rutigliano, President Contractors Surety Briefing for 2011 Presented By: Nick J. Rutigliano, President Table of Contents 1. Surety Industry Status 2. What Drives Your Bonding Capacity 3. Communicating Your Financial Conditions

More information

SAVINGS PRODUCTS AND THE LIFE INSURANCE INDUSTRY IN CANADA

SAVINGS PRODUCTS AND THE LIFE INSURANCE INDUSTRY IN CANADA SAVINGS PRODUCTS AND THE LIFE INSURANCE INDUSTRY IN CANADA Carl Hiralal 25 November 2004 1 Topics OSFI s Role Canadian Industry Insurance Products in Canada Insurance versus Savings Segregated Funds Universal

More information

Bonding and Insurance Workshop. Presented by Ingrid Merriwether, President & CEO

Bonding and Insurance Workshop. Presented by Ingrid Merriwether, President & CEO Bonding and Insurance Workshop Presented by Ingrid Merriwether, President & CEO 1 What is to Be Gained? Practical Knowledge of insurance and bonding How insurance and bonding protects you and others How

More information

How to best position your construction company to a surety in 2013

How to best position your construction company to a surety in 2013 How to best position your construction company to a surety in 2013 Table of Contents Surety 2013 market forecast... 3 Criteria used by construction surety underwriters... 3 Five key areas for best construction

More information

2.3.9 Construction Procurement

2.3.9 Construction Procurement 2.3 Management of the Project 2.3.9 Construction Procurement 2.3.9 Canadian Handbook of Practice for Architects Introduction Obtaining Bids Open Competitive Bids (or Public Tender Call) Invited Competitive

More information

BONDING AMAN UNION. November 21 st, 2012. Daniel Stausberg. Atradius Re

BONDING AMAN UNION. November 21 st, 2012. Daniel Stausberg. Atradius Re BONDING AMAN UNION November 21 st, 2012 Daniel Stausberg Atradius Re 0 Bonds Presentation - Agenda Introduction 1 - Overview Global Bonding Market 2 - Products 3 - Characteristics 4 - Atradius Re s expertise

More information

Subcontractor default insurance. 2013 Baker Tilly Virchow Krause, LLP

Subcontractor default insurance. 2013 Baker Tilly Virchow Krause, LLP Subcontractor default insurance 2013 Baker Tilly Virchow Krause, LLP History of the market > 1996: Created by demand of contractors with the goal of taking back control when subcontractors default. > 2012:

More information

Obtaining, Maintaining & Effectively Using Surety Credit

Obtaining, Maintaining & Effectively Using Surety Credit Obtaining, Maintaining & Effectively Using Surety Credit CONTENTS: Introduction The Surety Industry What Does a Surety Expect from a Contractor? What Should the Contractor Expect from the Surety? The Partnership

More information

PERSPECTIVE The Canadian Surety Industry: Traditional Construction Bonding & Subcontractor Default Insurance

PERSPECTIVE The Canadian Surety Industry: Traditional Construction Bonding & Subcontractor Default Insurance PERSPECTIVE The Canadian Surety Industry: Traditional Construction Bonding & Subcontractor Default Insurance INTECH PERSPECTIVE v1.2 2011.09.01 WHITE PAPER ABOUT INTECH INTECH Risk Management is one of

More information

Project Management Conference Yellowknife NWT. Surety Bond Claims. November 23, 2015

Project Management Conference Yellowknife NWT. Surety Bond Claims. November 23, 2015 Project Management Conference Yellowknife NWT Surety Bond Claims November 23, 2015 I Performance Bonds Surviving a Contractor Default Performance Bonds Guarantees Contractor will perform contract in accordance

More information

CONSTRUCTION INSURANCE

CONSTRUCTION INSURANCE CONSTRUCTION INSURANCE GROUP MEMEBERS Khalid Rehman Muhammad Saleem Dawood Khan Fahad-ullah Abid Ali Ismail Khan What is Insurance? 4 Insurance is a contract by which one party (the insurer), in exchange

More information

Managing Cash Flow on Construction Projects. Alison Sellers October 25, 2012

Managing Cash Flow on Construction Projects. Alison Sellers October 25, 2012 Managing Cash Flow on Construction Projects Alison Sellers October 25, 2012 1 The material appearing in this presentation is for informational purposes only and is not legal or accounting advice. Communication

More information

Building Bonding Capacity To Win Construction Contracts

Building Bonding Capacity To Win Construction Contracts Building Bonding Capacity To Win Construction Contracts Hopeton Hay Manager, The University of Texas System HUB Development Office 512/499-4377, hhay@utsystem.edu UT System HUB Technical Assistance Program

More information

Sewage Sludge Utilization Performance Bond

Sewage Sludge Utilization Performance Bond Sewage Sludge Utilization Performance Bond Total Sum of the Performance Bond (the Bond ) Bond. No. This Bond assures performance for Sewage Sludge Utilization Permit(s) ( Permit for Permits ) No(s). authorizing

More information

SURETY BONDS. them and the process of obtaining them. Those who are familiar with them and how they work

SURETY BONDS. them and the process of obtaining them. Those who are familiar with them and how they work SURETY BONDS PROTECTION FOR THE OWNER BEFORE THE WORK STARTS 1 By Daniel L. Rottinghaus, Esq. Property owners and asset managers need to be familiar with surety bonds, how to use them and the process of

More information

A.M. BEST METHODOLOGY

A.M. BEST METHODOLOGY A.M. BEST METHODOLOGY August 13, 2014 Rating Surety Companies Although surety insurance companies are analyzed with other property/casualty (P/C) insurers, their unique characteristics require additional

More information

2013 Stewart McKelvey. All rights reserved. Not to be copied or used in whole or in part without the express written consent of Stewart McKelvey

2013 Stewart McKelvey. All rights reserved. Not to be copied or used in whole or in part without the express written consent of Stewart McKelvey Construction Bonds Presented by: Sheree Conlon April 17, 2013 2013 Stewart McKelvey. All rights reserved. Not to be copied or used in whole or in part without the express written consent of Stewart McKelvey

More information

CONTRACTOR QUESTIONNAIRE Projects $50,000-$750,000

CONTRACTOR QUESTIONNAIRE Projects $50,000-$750,000 3225 Monier Circle, STE 100 Rancho Cordova, CA 95742 (877)654-2327 Toll Free (916)737-5720 Phone (916)737-5737 Fax CONTRACTOR QUESTIONNAIRE Projects $50,000-$750,000 We are sensitive of the time investment

More information

Anatomy of an IT Outsourcing Deal. Bruce Laco Deloitte John Pickett IT World Canada Barry Sookman McCarthy Tetrault

Anatomy of an IT Outsourcing Deal. Bruce Laco Deloitte John Pickett IT World Canada Barry Sookman McCarthy Tetrault Anatomy of an IT Outsourcing Deal Bruce Laco Deloitte John Pickett IT World Canada Barry Sookman McCarthy Tetrault 3656867 Agenda Key Considerations for IT Outsourcing Decision Anatomy of an Outsourcing

More information

Chapter 3. How Securities are Traded

Chapter 3. How Securities are Traded Chapter 3 How Securities are Traded Primary vs. Secondary Security Sales Primary: When firms need to raise capital, they may choose to sell (or float) new securities. These new issues typically are marketed

More information

What is a surety bond?

What is a surety bond? Contract Surety: Bonds Have More Fun! Bob Cave Chief Underwriting Officer SureTec July 24, 2013 IIA Houston Camp Big I What is a surety bond? Legally binding 3 party agreement Looks like insurance, works

More information

World Bank Distance Learning

World Bank Distance Learning World Bank Distance Learning The Early Warning Test Ratios for General Insurers Washington, DC April 9, 2001 Lawrie Savage & Associates Inc. History of Early Warning Ratios Until early 1970's, everyone

More information

Directors and Officers Liability Insurance Guidance and Advice for Risk Managers

Directors and Officers Liability Insurance Guidance and Advice for Risk Managers Directors and Officers Liability Insurance Guidance and Advice for Risk Managers The insurance market has responded to recent corporate failures by requiring more information from organisations seeking

More information

Request for Quote Number: 2015-06-PRC Baseball Diamond Backstop Re-Fence

Request for Quote Number: 2015-06-PRC Baseball Diamond Backstop Re-Fence Request for Quote Number: 2015-06-PRC Baseball Diamond Backstop Re-Fence Sealed request for quotes will be received by Brian Tocheri, CAO/Clerk at 341 10 th St. Hanover, Ontario, N4N 1P5 until 2:00 pm,

More information

Australian Constructors Association. Bonding Issues Faced by Construction Companies in Australia

Australian Constructors Association. Bonding Issues Faced by Construction Companies in Australia Bonding Issues Faced by Construction Companies in Australia October 2009 This report contains 17 pages 6277500_6 Contents 1 Introduction and Summary 1 2 Purpose of Performance Guarantees and Bonds 3 3

More information

ABA Private Equity M&A Sub-Committee

ABA Private Equity M&A Sub-Committee 2014 Marsh USA Inc. ABA Private Equity M&A Sub-Committee January 30-31, 2015 Agenda M&A Transactional Insurance Overview Representations & Warranties Insurance Tax Indemnity Insurance Other Contingent

More information

Nominated Subcontractors on International Projects: Approaches to Risk Allocation

Nominated Subcontractors on International Projects: Approaches to Risk Allocation Nominated Subcontractors on International Projects: Approaches to Risk Allocation September 5, 2005 (he following outline was used in a presentation to the Overseas Construction Association of Japan, Inc.

More information

GENERAL INSURANCE BUSINESS UNDERWRITING

GENERAL INSURANCE BUSINESS UNDERWRITING GENERAL INSURANCE BUSINESS UNDERWRITING R.Qaiser, Professor, NIA, Pune For a general insurance company, underwriting business is the basic core activity. All other activities, in fact, emanate from this

More information

Refinancing / Home Equity Line of Credit Requirements

Refinancing / Home Equity Line of Credit Requirements FirstService Residential New York, Inc. Refinancing / Home Equity Line of Credit Requirements Chelsea Warren Corp. 155 West 20 th Street New York, NY 10011 All financing must be approved by the Board of

More information

Agreements, bonds and guarantees

Agreements, bonds and guarantees Agreements, bonds and guarantees SPV Formation The Special Project Vehicle (SPV) may take a variety of forms, including a corporation, limited liability company, general partnership, limited partnership,

More information

CONTRACTOR DEFAULT & SURETY PERFORMANCE:

CONTRACTOR DEFAULT & SURETY PERFORMANCE: CONTRACTOR DEFAULT & SURETY PERFORMANCE: A PRACTICAL GUIDE FOR UNDERSTANDING AND NAVIGATING A BOND DEFAULT SITUATION TEXAS CITY ATTORNEYS ASSOCIATION SUMMER CONFERENCE JUNE 9-11, 2010 SOUTH PADRE ISLAND,

More information

SOA Annual Symposium Shanghai. November 5-6, 2012. Shanghai, China. Session 2a: Capital Market Drives Investment Strategy.

SOA Annual Symposium Shanghai. November 5-6, 2012. Shanghai, China. Session 2a: Capital Market Drives Investment Strategy. SOA Annual Symposium Shanghai November 5-6, 2012 Shanghai, China Session 2a: Capital Market Drives Investment Strategy Genghui Wu Capital Market Drives Investment Strategy Genghui Wu FSA, CFA, FRM, MAAA

More information