179. De-Mystify Subdivision Bonds

FIA Surety is a strong niche player that specializes in Site and Subdivision Bonds – but you may not be. In fact, if “surety” is a small slice of “bonding”, Subdivision is an even smaller part (a subdivision?) of surety bonds. Cool bonding joke?

Let’s take some of the mystery out of this subject:

  • Q. Who may require one of these bonds? A. Any commercial property owner who modifies or adds to their building or property, strip mall developers, home builders, land developers.
  • Q. Are these the same as a Performance Bond? A. They do guarantee that construction will be completed, but on these bonds, the principal (bond applicant) is paying for the work. Other differences: There is no construction contract with the obligee, and no required completion date.
  • Q. What is the underwriting approach?
    • A questionnaire and financial statements are required
    • There may also be mandatory bond forms from the obligee
    • The planning board approval for the project is reviewed
    • We also need the municipal engineer’s list of “public improvements” that will be covered by the bond
    • Since the work is self-financed, we need evidence of how the client will fund the work
    • Also need to know who will actually perform the construction

That’s pretty much “it!” Sounds easy, right? Why do most underwriters avoid these bonds? We don’t! We have written them energetically for more than 40 years!

When you need one, call the experts.

Watch Site and Subdivision Bond Video

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

“Follow” this BLOG in the upper right hand corner for more exciting surety bond stuff!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s