Surety Capacity and Market Stability — the Boat is Rocking!

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Surety Capacity and Market Stability — the Boat is Rocking!

Has your surety started asking more questions?  Do they act more nervous?   Many sureties are like that subcontractor who is losing money on other jobs; they can make life miserable for you.  Because of their losses, many sureties have dramatically raised their underwriting standards along with their rates. Some sureties have severely limited job sizes or exited the market. Some have reinsurance problems.

Many sureties who have always relied on strong underwriting fundamentals are doing just fine.  If you are getting six questions before with every bid bond request, you may want to give us a call.  We represent several sureties who still offer low rates, lines of credit, and excellent service to good contractors.  What if the surety market worsens?  What can you do now to prepare yourself for that? 


1.         MAKE MONEY! Build up the Net Worth and Working Capital of your Company. This is not the year to take all your profit out to save on taxes. There are tax-deferring strategies available.

2.         Provide timely Percentage of Completion financial statements from a construction-oriented CPA. If you don’t know one, call us!

3.         Develop good internal financial information so that you can do timely Financial Statements and Work on Hand Schedules. Be ready to provide Agings of Accounts Receivables and Payables if asked.

4.         PLAN AHEAD! My dad used to say,” When you fail to plan, you plan to fail.” Let us know your business plan so that we can position and develop the best bonding program to achieve your plan!

5.             Routinely collect references on your completed jobs. These references form a nice portfolio for future opportunities when you may want to “stretch.”

6.         Build relationships based on quality and experience. Low price may be irresponsible. Check references. GC’s who are “good to subs” get the best value on quality projects in the long-run.


In this turbulent economy and competitive market, focus on the fundamentals of Financials, a Plan, and, quality relationships.   

By | 2013-08-23T16:36:36+00:00 August 23rd, 2013|Surety Blog|Comments Off on Surety Capacity and Market Stability — the Boat is Rocking!

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