We often get asked about subcontractor default insurance (SDI) and how it compares to surety bonding. Some people just call it “Subguard”. Subguard is Zurich’s proprietary product that was first introduced to the market, and that many contractors are familiar with that term. However, many insurance companies have entered this product field over the years. […]
Continuity and succession planning are important to bond companies. There are many ways in which contractors can accomplish the transitioning of their business. One popular method we are seeing more of is the Employee Stock Ownership Plan (ESOPs). ESOPs are a tax-qualified retirement plan that invests in the stock of the company. They can be […]
Several years ago, Senate Bill 1092 was approved, which revised the existing surety bond requirements for all construction trucking service brokers in the state of California. This bill was signed into law in September of 2012 and it went into effect in January of 2013.
If you live in New York and want to repair, remodel, or build residential properties, you must obtain a home improvement contractor license and license bond. Acquiring a license is something that is required by state authorities to guarantee that the contractors are fully qualified and that they are safe to do business with. Consumers […]
A reclamation bond is a surety bond that is required by the Bureau of Land Management and other public owners for land disturbance and mining operations. A reclamation bond is usually a requirement if your business wants a permit to begin mining or a related operation at a certain project sight. The purpose of the […]
As of the date of this blog, there are over 280,000 contractors in the state of California. With so many operating contractors, California like many states requires contractors to be licensed and have a California Contractor License Bond to protect the general public. A California Contractor License Bond is a three-party guarantee between a contractor […]
The most popular method for construction project delivery is still design-bid-build. This is where a design professional and owner create plans for a project before sending the project out to bid. A contractor is then selected to build the project. However, that is changing. According to a study by FMI last year, Design Build projects […]
Service contractors have a tough time when it comes to surety bonding. They fall into a gray area for most surety bond companies. Are they contract surety or are they commercial surety? How do they go about getting a bond?
With surety bonds, collateral is typically used for protecting the surety bond company from a possible loss. Here, you can learn about the collateral used for surety bonds, along with some pros and cons of each.
Funds control is a term used in surety bonding and can also be called funds administration or just escrow. It usually involves a third party handling the contract proceeds to process payments for bonded contractor. The idea is very similar to a construction loan on the residential side. The process typically looks something like this: