1 / 17

Surety Bonds

Surety Bonds. Performance Bond Payment Bond. Benefits Of Bonding Subs. Prequalified subs Risk Transfer Improves contractor’s credit standing. Prequalification Process. Business Operations. Financial Strength. Experience. Sub Documents. Exposure & Progress. Size & Location.

Télécharger la présentation

Surety Bonds

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.


Presentation Transcript

  1. Surety Bonds • Performance Bond • Payment Bond

  2. Benefits Of Bonding Subs • Prequalified subs • Risk Transfer • Improves contractor’s credit standing

  3. Prequalification Process Business Operations Financial Strength Experience Sub Documents Exposure & Progress Size & Location Ability To Perform

  4. Indemnification • Corporate & personal assets on the line • Incentive for sub to complete bonded work

  5. Availability of Surety • Traditional sureties • Specialized sureties • SBA program

  6. Confirm Ability To Provide Bonds

  7. Limited Surety Capacity • Labor-only contract • Phased contract

  8. Qualify The Subcontractor’s Surety A.M. Best Companywww.ambest.com Dun & Bradstreetwww.dnb.com/us Standard & Poor’swww.standardandpoors.com Moody’swww.moodys.com Treasury Dept.www.fms.treas.gov/c570/c570.html State Insurance Dept.www.naic.org/state_web_map.htm

  9. Surety Rates $

  10. Surety Communications • Job status reports • Provide early warnings of serious problems

  11. Dispute vs. Default • Performance obligations defined in subcontract • Notify surety of problems • Formal written declaration of default

  12. Why Subcontractors Fail Accounting Issues Management Issues Personnel Issues Performance Issues Failure Unrealistic Growth

  13. If Default Occurs • Acknowledge claim • Investigate claim • Determine obligations • Fulfill obligations Surety

  14. Surety’s Options • Assist subcontractor to completion • Bring in replacement • Negotiate financial settlement Surety

  15. Establishing A Bonding Policy • Establish thresholds • Articulate exceptions • Notify subcontractors & surety Contractor

  16. For More Information Surety Information Office 1828 L St. NW, Suite 720 Washington, DC 20036 202-686-7463 | Fax 202-686-3656 www.sio.org | sio@sio.org

More Related