Xenophobia: “Fear of the Unknown.” Do you fear Surety Bonds, avoid them?! Could it be because you just don’t know about them? Let FIA Surety boost your knowledge and supercharge your career! Our next Free CE Zoom webinar is on 10/2/23: “Commercial and Miscellaneous Bonds.” After this 3 credit, free course you will be able to: * Quickly indentify the type of bond * Determine the nature of the surety obligation * Predict the key underwriting factors * Score whether it is an easy or a “life-changing” placement! You might even Enjoy this class. We have fun and give away a valuable gift at every session. Join us for the FIA Surety 10/2/23 Free Zoom webinar! 3 credits, no exam. “Commercial and Miscellaneous Bonds” Click for more info. FIA Surety / First Indemnity of America Insurance Company 2740 Rt. 10 West, Suite 205 Morris Plains, NJ 07950 Office: 973-541-3417 Providing A rated, T listed bonds in all states!

• Contract Bonds: Cover contracts
• Court Bonds: Cover legal actions

So why are Commercial and Miscellaneous Bonds so confusing?

After you attend our 10/2/23 Free CE Zoom webinar, they won’t be!

What you will learn:

1. How to instantly deterimine the type of bond.
2. Get an immediate read on the underwriting: Will this one be easy or a grind?
3. What info will the underwriters require?

Join us on 10/2/23 for this accredited, Free CE webinar. Bring your colleagues! Click for info and to register: https://fiasurety.blog/2020/08/16/free-ce/

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205 Morris Plains, NJ 07950
Office: 973-541-3417
Providing A rated, T listed bonds in all states

GOD Bless our brave veterans and first responders!

Protectors of the greatest nation in the history of the world.

FIA Surety / First Indemnity of America Insurance 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!

It’s not too late to get in on the next FIA Surety Free CE Zoom webinar on Monday, 10/2/23:

“COMMERCIAL AND MISCELLANEOUS BONDS”

Attend from your home or office computer for 3 credits. No exam. Register or watch one minute video about our accredited CE school.

Brought to you by your best carrier for Contract Surety, Site and Subdivision Bonds:

FIA Surety / First Indemnity of America Insurance 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!

Here is a perplexing situation. How would you handle this bond request?

The client is planning to modify ($$$) a building they are leasing. The landlord wants a security deposit equal to the value of the construction work – to assure that it is completed.

Since this will unduly tie up the client’s money, the agent is asking for a surety bond to protect the landlord.

1. What kind of bond would that be?
2. Who is the applicant / Principal?
3. Can a Performance Bond be issued for the landlord if they are not party to a contract?

The FIA Surety Solution:

• There is no bond specifically for this siuation. We could call it a “Leasehold Improvement Indemnity Bond.” I just invented that!
• The only contract involved, that could be the subject of a Performance & Payment bond, is between the lessor / client and their builder.
• If such a bond is issued, the builder would be the applicant, and the bond cost would be passed to the lessor via the construction contract.
• In this case, the landlord is an “interested party” regarding the contract, and therefore entitled to be included under the P&P bond by issuing an Dual Obligee Rider – normally for no extra charge.

In this manner we have satisfied the need of the landlord, at no charge to them, and avoided trying to issue a Leasehold Improvement Indemnity Bond (which doesn’t exist!)

Why not put the great minds at FIA Surety to work on your next bond problem opportunity?

And don’t forget to check out our Free CE program for agents here.

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

Providing A rated, T listed bonds in all states!

The FIA Surety School has two exciting webinars coming up. If you want to understand and analyze financial statements, these free Zoom meetings are for you!

They are offered as part of our monthly “Free CE” program. You can attend from any office or home computer, earn 3 CE credits and there is no exam. Interested?

On 7/10/23 we are presenting the accredited program “Understanding Financial Statements.” On 8/1/23, this will followed by “Advanced Financial Statement Analysis.” This is a powerful combination for producers, underwriters and their colleagues!

For more info and to register, click here.

FIA is a carrier providing A rated, T listed bonds in all states: Contract, Site & Subdivision Bonds. We’re problem solvers!

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

Here is an interesting case we SUCCESSFULLY bonded last week:

• The client was awarded a municipal contract. They performed the work previously as a subcontractor, and now obtained a direct (prime) contract with the city.
• There was no bidding process or bid results to evaluate the adequacy of the contract price.
• The intial multi-million dollar contract had a 3 year term with a 2 year option. The bond requirement was simply “a 100% Performance and Payment Bond” with no mention of the bond term. Therefore, the expected bond term was 3 or more years!
• The client presented an internally prepared, 10-month financial statement on the Cash Method (normally not acceptable)

How did we solve this for our agent?

1. The client’s project costs while working as a subcontractor were compared to the new direct contract amount to determine the adequacy of the contract price. This enabled us to ovecome the absence of bid results.
2. We bolstered the financial statement by obtaining supporting schedules.
3. After direct discussions with the obligee, the city agreed to issue a contract amendment provding for an annual bond
4. The customer agreed to provide an Accrual Method year-end statement going forward

What did it take to get this done for our agent? Determination to succeed. Creativity. Flexible underwriting. All stuff we do.

Is this what you want from your best surety carrier? You can have it!

For A rated, T-listed Contract, Site, and Subdivision Bonds in all states, call us and make your success story happen!

FIA Surety / First Indemnity of America Insurance Company “www.fiasurety.com”
2740 State Route 10 West, Suite 205
Morris Plains, NJ 07950-1258
Call: 856-304-7348

Your client performed the contract. However, as a result of interference by a major vendor, the project is thrown off track and now there’s a performance bond claim.

The surety has indicated that the file is “on hold” pending resolution of the claim. Your client engaged in attorney but no immediate resolution is in sight.

In the meantime the contractor is becoming desperate to acquire new work and is threatening to go to a new bonding source for bid bonds (maybe by posting collateral?) If the client disengages with the incumbent surety, their claims department may decide to conclude the matter by paying the claim and closing the file. That would be the worst outcome:

• Your client will have a paid bond claim permanently on their record
• You lose a customer
• The claims department will subrogate against your contractor on a claim that possibly should not have been paid.

Surety Challenge Question: How could this outcome have been avoided? Add your comments below!

Brought to you by your best carrier for Contract, Site and Subdivision Bonds,

FIA Surety / First Indemnity of America Insurance Company

There’s NOTHING NEW in Surety, except maybe this: “Runway”

Investors are familiar with the concept. It estimates how long a start up can operate on it’s initial capitalization. I apply this to surety analysis, as well.

Underwriters calculate Net Quick as an indication of future cash flow. NQ will be used to finance the start of new contracts and may solve problems on existing ones.

Under Worst Case circumstances, NQ will fund company opeations in the absence of new revenues. The unaviodable, future costs of operating are called “overhead,” or General and Administrative Expenses on the Profit and Loss statement. The ratio between the expected cash flow and the typical overhead will show the staying power or length of “Runway” for the company.

How to Calculate Runway on a Surety Account

On the last company fiscal year-end financial statement, find the average monthly overhead expenses. For example, on a Profit and Loss Statement covering a 12 month period, divide the General and Administrative Expenses by 12. Now you know the average monthly expense it costs to keep the lights on, pay the office salary, insurance charges, etc. These expenses arise even when the company has no active projects (no new revenues). Let’s say the average monthly overhead is $100,000.

Next, we divide the Net Quick by the monthly OH. If the NQ was $400,000, 400,000 divded by 100,000 = 4, meaning (theoretically), in the absense of any new revenues, the company can run for four months covering ongoing expenses with the expected cash flow (NQ).

In an ongoing business, there are many other factors to consider. But Runway is worth knowing and tracking because it is a measure of the client’s staying power. And that’s something we always want to know about.

Steve Golia

Also worth knowing, FIA is a carrier providing A rated, T listed bonds in all states: Contract, Site & Subdivision Bonds. We’re problem solvers!

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

Learn about our Free CE School here.

They’re tough!

“We have rules, and that’s it!“

It can be frustrating when you need a surety bond, especially if you are not a Super-Expert.

That’s where we come in: FIA Surety! We are the carrier you can actually talk to. We provide A rated, T listed bonds in all states, and we work hard to approve the business.

Bubbles and Butterflies: It’s not just a big party over here. We DO underwrite the business. (Our L/R is extremely low) But our agents know we work hard to make them look good. Read our reviews (here), then do yourself a favor:

Call us with your next surety opportunity, including Contract, Site & Subdivision Bonds!

FIA Surety / First Indemnity of America Insurance Company

2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

Learn about our Free CE School here.