Other Bond Types
A contract bond is a three-party agreement, whereby the Surety (insurance company) guarantees the Obligee (recipient of the service) that the Principal (contractor) will perform in accordance with the terms of the contract, and will pay their subcontractors and suppliers.
Since surety is a credit relationship, applying for a bond is similar to applying for a bank loan. Sufficient time is required to carefully evaluate all aspects of your submission. The more information you can provide us with for your submission, the sooner a decision can be made.
While the smaller contract bonds, typically under $200,000, are often written on the basis of the financial strength of the owners and officers, other bond types and larger contract bonds are financially underwritten. The following information may be needed in order to qualify for a bond.
Resume of Experience and Contractor Questionnaire
The resume of experience is required for all owners, head estimators and foreman.
Business Financial Statements
Required are fiscal year-end financial statements for the last three years, completed by an independent CPA.
Personal Financial Statements
All owners and major stockholders must submit a personal financial statement.
Aging of accounts receivable, concurrent with the most recent fiscal year-end business statement
General Agreement of Indemnity
All owners of the company (sole proprietors, partners, or corporate stockholders) and their spouses must sign as Indemnitor. If the company is a corporation, the President must sign on behalf of the corporation, with the Secretary attesting to the signature. All signatures must be notarized.
A schedule of all work on hand and percentage of completion is required for all jobs, bonded and unbonded.
Evidence of borrowing capability and/or lines of credit is required from your bank.
Letters of reference will be required from your suppliers and previous jobs, if available.
Additional information may be required after initial review.