“Consent of Surety” should only accompany a bid bond when required in writing.

This tidbit brought to you by FIA Surety, your best carrier for T-listed, A rated surety bonds up to $10,000,000: Contract, Site and Subdivision.

Free CE program update: We added new states!! Check it out.

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

Arizona and Massachusetts Agents!

You are now eligible to join the FIA Surety Free CE program. All our courses are now accredited in AZ and MA. And we are close to adding a third state soon!! Wooooo!!

So here’s your choice: you can PAY for surety training, TRAVEL to the school, incur LODGING expenses, pay for MEALS, MISS your family, cat and goldfish – or – get all your required CE credits from the convenience of your home or office, free, with no exams.

Student comments from our 4/1/25 webinar:

• Thanks for the presentation Steve! As always it was enjoyable and informative.
• Thank you Steve! Your explanations are very thorough
• Informative as always. Looking forward to next month. Thank you!Love it Steve. Keep the good content coming!
• Absolutely, can’t wait for the next one.
• Always enjoy your classes Steve! Looking forward to the next one! Thank you!
• I always enjoy your classes! thanks!
• Thank you for the class, cannot wait for the next class.
• Thoroughly enjoyed the content – extremely helpful!
• This was extremely helpful! Thank you so much and I will see you next month!
• Thanks for this presentation. This program has been very informative and I look forward to your next class! Always a pleasure 🙂
• Steve Thank you for making the topic interesting

These accredited CE courses are Zoom webinars you can attend from home or office. Our webinars are wildly popular, free and there are no exams. 3 credits each.

May 1, 2025, Thursday “All About Performance and Payment Bonds” 8:45 am to 12:10 pm Eastern time. Starting in July, 2025, all our programs will begin at 1:00 pm eastern.

Click for info and “one time” registration.

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

A Carrier Providing Contract, Site and Subdivision Bonds up to $10,000,000!

Another FIA Surety Success Story!

The Situation: Never been bonded before, but this 50+ y.o. company needs a multi-million dollar Performance and Payment Bond.

Issues:

1. Public contract owner but the bid results were confidential.
2. Turnkey contract, includes design exposure.
3. The work has started.
4. The founder / stockholder is retiring in a few months – including a stock buyout. Can the company operate successfully under new management?
5. The major stockholder is unwilling to give personal indemnity. “I never had to give it before.” (Never bonded) “I’m not gonna do it now, just as I’m leaving!”
6. How will the buyout affect the company’s financial position? The buyout is scheduled for after the bond is issued and the contract will be incomplete.
7. The minority owners / spouses are hesitant to give unlimited personal indemnity. Their ownership is under 5%. (I get it!)
8. Never bonded before, only have internal company financial statements.
9. The client was under pressure from the obligee, so they filed a bank issued Irrevocable Letter of Credit in lieu of the surety bond.
10. Now the cash they need for the buyout is tied up with the bank (in support of the outstanding ILOC)!

Wow! Where to start? How we solved it:

• We reviewed the adequacy of the contract price.
• We verified the capabilities of the subcontractor performing the design responsibilities.
• We reviewed the terms and timing of the buyout agreement.
• We gathered the personal financial statements of the surviving officer / indemnitors.
• Their resumes assured us of their expertise and ability to keep the company on course, in the absence of the founder.
• After a bit of convincing the personal indemnity fell into place (except for “the boss”).
• We conducted a detailed review / verification of the in-house FS.
• We created a draft P&P bond and the principal presented it to the obligee for consideration to replace the ILOC.
• To protect the financial position of the company (in light of the upcoming buyout), a Capital Retention Agreement was executed and ratified by the Board of Directors. This prevented depletion of the company’s net worth during the bonded project.
• A Status Inquiry was sent to the obligee to report on the current condition of the ongoing contract. It indicated a healthy project.
• The indemnity was executed, excluding the major stockholder but including the minority owners and spouses.
• The obligee approved our bond to replace the ILOC.
• The switch was made, our bond covered the entirety of the contract.
• The principal got their funds (backing the ILOC) immediately released to facilitate the buyout.

Wooo! A tough one but fun too. We love “thinking on the job!” This is what you get from a 45+ year old, surety only carrier!

Fun facts:

1. FIA Surety is now on the T-list!
2. We are a Palomar company, PLMR on the NYSE, rated A X.
3. We write Contract, Site and Subdivision bonds up to $10,000,000!

Call us when your next one pops up.

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

A Carrier Providing A rated, T listed Bonds in All States.