When it comes to surety bonds, you know your way around a power of attorney. But are you smarter than the average bear?

Here goes. Answers at the end. No peeking.

1. “P&P Bond” means: A) Preserve and Protection Bond B) Performance and Premium Bond C) Performance and Payment Bond
2. The Obligee: A) Is the beneficiary of the bond B) Is the Owner of the bond C) Applies for the bond
3. Penal Sum is the: A) Punishment for late completion B) A famous soup made in Asia C) The bond amount
4. The party whose actions the bond concerns: A) Principle B) Principal C) Prince Epal
5. Dual Obligee means: A) Bond has multiple beneficiaries B) The Obligees duel to determine outcome of the bond claim C) The bond has dual “exhaust” clauses
6. Collateral: A) Is frothy and collects around the rim B) Is lateral to the collar C) Security deposit held by the surety
7. The formal name of the T-List: A) Circular 570 B) Circular 750 C) Circular 007
8. A legitimate Payment Bond claimant: A) All painters B) Local state government C) Laborer on the bonded project
9. Overrun: A) When the contractor has too much work on hand B) When the contract price is increased C) When asphalt paving is applied too thick
10. Example of an Obligee default: A) Failure to sign the bond B) Failure to pay as required in the contract C) Failure to cap the liquidated damage clause in the surety consent

Bonus Question: Can an insurance agent make a Payment Bond claim for the uncollected surety premium? A) DUH!!! B) I dunno C) What?!

All right, here are the answers.

1. A) Performance and Payment Bond. I hope you got that one!
2. B) The Obligee is the beneficiary of the bond
3. C) Penal sum is the bond amount. (But that soup is awesome!)
4. B) The party whose actions the bond concerns is the Principal
5. A) Dual Obligee bonds have multiple beneficiaries
6. C) Collateral is a security deposit held by the surety
7. A) The T-List (Treasury Department List of approved sureties) is Circular 570
8. C) A legitimate Payment Bond claimant is a laborer on the bonded project
9. B) Overrun is an increase in the contract price
10. B) Example of an Obligee default is the failure to pay as required in the contract

Bonus Question: NO! Payment bonds cover suppliers of labor and material. The original name for these instruments is a “Labor and Materialmen’s Payment Bond.” Insurance premiums are not covered.

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First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

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If you attended our Free CE course called “Surety Bonds 101” you know that bonds are not insurance.

You may recall some of the differences: Bonds have three parties involved not two, there is no risk transfer, the bond may be non-cancellable, etc.

A significant part of surety underwriting is based on trust, trust that is the product of a favorable rapport between the producer and underwriter. This simply means, the more bonds you write with a specific underwriter, the more you will be able to write – because a foundation of trust has been created. It is important to the underwriter. Therefore, it must be important to the producer.

How to Go Deeper

The agent’s marketing effort should be focused on one underwriter, selected based on the company’s appetite, the underwriters preferences, and any other determining factors. If #1 doesn’t work out, you move on to #2.

What you don’t want to do is spread the file all over the market. Doing so erodes your rapport with every underwriter. It sends this message, “You people are all the same to me. I don’t offer any market loyalty. I’m not interested in building a relationship…” Get it?

Go Deeper. Build a rapport with your best markets. Assure them “This is yours to write!” and watch them rise to the occasion. That’s what WE do!

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

Site and Subdivision Bond Specialists

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Q. WHAT IS a credit based surety app?

A. These are short applications bonding companies use for bid and performance bonds that meet certain requirements.

Q. What are the typical criteria?

A. Contracts that are eligible for this approach are usually “plain vanilla:” Not too long or complicated, not too big, normal work for the client, in a favorable location, etc.

Q. What’s the advantage of using such apps?

A. The underwriting process is based on the quality of the applicant’s personal credit report, plus a few key underwriting questions. This method avoids having to gather all the normal bonding stuff.

Q. Are all these “quick” apps the same?

A. To a degree, yes. However, will the processing be both quick and easy? The program is not beneficial if you can’t get an answer when you need it…

FIA Surety’s FASTAPP includes a service standard: Submit our completed short form app and get a SAME DAY RESPONSE! How can you lose? And with a fast response, you’ll probably win the business!

Get it: FASTAPP by FIA Surety

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

P.S. Check out our upcoming Free CE schedule here!

Follow this BLOG in the upper right hand corner for more cool bond stuff…

All right, calm down…

You need a Bid or Performance Bond and you made a mistake. You used the “Quick ‘n EZ” bond app, but you didn’t know it is the “Quick ‘n EZ and SLOW” bond app!

You need our same day service promise. Send in a completed FIA FASTAPP and get a same day response. We Promise!

So dry your tears, click for the app and let’s go!

Use the FIA Surety FASTAPP for Bid and Performance Bonds up to $500,000.

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

P.S. Check out our upcoming Free CE schedule here!

Follow this BLOG in the upper right hand corner for more cool bond stuff…

“Easy” bonding apps: They promise to be great… But they are missing one thing: Time standards. WHEN will you get an answer? That’s the missing piece.

OK, here come the fixers. Your best problem solving surety now goes on record with a same day service standard. That’s right! Send in a completed FIA Surety FASTAPP and you can expect a SAME DAY RESPONSE.

There. We said it.

Get our FASTAPP for contract bonds up to $500,000 Click!

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

P.S. Check out our upcoming Free CE schedule here!

Follow this BLOG in the upper right hand corner for more cool bond stuff…