#105 Surety: Choose Yer Partner!

What fun! But before the music starts you pick your partner: Somebody who has all the moves and can keep up with you.

In bonding, how do you choose your surety partner? What are the “moves” you want from your bonding company?

  • Speed – You need answers promptly. Today business is moving faster than ever!
  • Ambition – Look for underwriters that are hungry, willing to work for the business.
  • Capability – Search for the appropriate skills and credentials. Do you need a surety that loves pavers, or roofers, trash haulers or remediation*?
  • Consistency – The surety reviews the history of bond applicants. You can review the history of the surety. Steady? Committed? Long-established?

There’s nothing more important than picking the right partner. Otherwise you’re doomed to disappointment and awkward missteps.

There is a spot for you on the FIA Surety dance card. We are steady, long-established and successful. We have all the right moves for contract surety, site and subdivision bonds. Call us with your next one.

* Yes, we write all of those and more.

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

An “A Rated” Carrier

We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

Beautiful!

#83 Collateral: The Big Nasty

Remember when you had to take bad tasting medicine as a kid? “OK honey, this will be good for you!!!

Collateral is a little like that. Here’s the situation:

When contractors apply for bid and performance bonds, sometimes the surety underwriters are reluctant to provide them. They view the risk as excessive. A way to sweeten the deal, reduce the perceived risk, is for the contractor to give the surety funds to hold “collateral” until the bond is released.

That’s all good. It gets the deal done. The contractor gets the bond, starts the contract and can (hopefully) make some money. When everything is done, they get the collateral back. Simple.

However, it’s not THAT simple. The collateral is cash, cash the contractor no longer has to help finance and complete the project. So the very thing they need to be successful is taken away from them in order to get the bond. Yipes!! That’s a heavy price to pay.

It’s a double edge sword for the surety, too. They were somewhat reluctant to provide the bond, now they have taken an important resource (cash) away from the client – possibly creating a situation where a bond claim is more likely. This is the main thing they want to avoid… That’s no bargain.

Guess what, we haven’t even gotten to the nasty part yet. The first nasty is when the job is half done. The client asks for half of the collateral back and are told they can’t have it until the end: “We have no way of knowing how large a bond claim might be.” When they DO get to the end of the job, they STILL can’t have it back because the funds are typically held until the end of the lien period (when payment bond claims may surface). Some sureties hold it until the maintenance period ends (one or two YEARS?!) Torture

Biggest Nasty: There have been cases where the client is having trouble completing the project. So they contact the surety, “We have a cash flow problem but want to finish this project. If we get the collateral back now, it will get us through and everyone will be happy – no chance of a bond claim.”

What do you think the answer is? The collateral is for the protection of the surety. So they will hold it and if there is a default, the funds are used to finish the project with the new completion contractor. It sounds brutal but it’s true.

So there’s your bitter medicine. It makes sense in some cases, but it is important to understand the rules of the game before you play.

And when you need a Subdivision or Contract Surety Bond, call us!

Steve Golia, Surety School Director

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

An “A Rated” Carrier

Surety: Hate Boring CE Classes?

Here are actual student comments from our recent Free CE webinar “Understanding Financial Statements.

"This was a good class Steve.  Really helped explain the financial statement and if a company is making money, keeping money in the business, or losing money.  Thanks"
"I thought this was a really great class.  I don't have any prior knowledge about financial statements and I learned so much.  Thank you!"
"Steve, I am a CPA and you did a terrific job. Great job, really."
"Fun"
"I found the high level analysis very helpful and you kept the explanations interesting, thanks!"
"This was a great review of financial statements which I have not really examined before. Thanks so much for the in-depth review."
"Thanks Steve, well done. I will attend almost any CE Bond class you do. I like knowing what I should be picking out of a F.S. that underwriters will think is good or bad. Zoom makes this so convenient. Thanks again."

Well, there you have it. Why pay for a boring CE class when you can attend an interesting, Free CE webinar? Check out our upcoming schedule here: Free CE

And when you need a Subdivision or Contract Surety Bond, call us!

Steve Golia, Surety School Director

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

An “A Rated” Carrier

We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

Surety: BIGGER Isn’t Always BETTER

Paychecks, desserts and warm hugs: Bigger is always better!

But let’s face it, sometimes it isn’t. One example may be the bonding company you’re dealing with. What do you get with a BIG surety carrier?

  • Underwriting authority divided into multiple levels shared by branch and home office people
  • Prohibited transactions lists to prevent creative / aggressive underwriting
  • Slow response times as communications run up and down (and up and down again) the chain of authority

With smaller sureties…

  • With a smaller bonding company, such as FIA Surety, the most senior underwriter reviews every transaction and is only a phone call away
  • Approvals come quickly when the decision-making structure is extremely flat
  • You can build a rapport with senior management!

Strong underwriting results = a consistent appetite. FIA has produced a profit for the last ten years!

In surety, BETTER is BETTER. You need a smaller, more agile carrier like FIA Surety! We get it done. Call us for Contract Surety, Site or Subdivision Bonds.

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

An “A Rated” Carrier

Visit our Free CE school.

Surety Underwriters: 2 Flavors

With Surety Bond Underwriters, you get 2 choices.

Flavor #1: Checklist Underwriters

“We have a checklist. We go down the list and check off the boxes. If everything is checked off, the bond is approved.

It’s called underwriting!


Flavor #2: Production Underwriters

Review the details of the case.

The “big picture” is evaluated. No case is perfect. Approve the bonds that deserve approval.

OK, which do you want on your next surety bond? At FIA, our revenues are up with spectacular underwriting results. We are highly experienced, detailed underwriters with a problem-solving attitude.

“All board!” Call us with you next Contract, Site or Subdivision Bond.

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

An “A Rated” Carrier

Visit our Free CE school. Next webinar: “Understanding Financial Statements” on 7/1/21

Last Call! Understanding Financial Statements

i-dont-undertand

They are mysterious, baffling, strange..
All those numbers in columns, what do they MEAN?!

On July 1st, find out! This is the first offering of our newest 3 credit Free CE course.

Everyone is invited! Free Zoom webinar, no exam. Accredited continuing education course in DE, FL, GA, MD, NC, NJ, PA, SC, TN, TX, VA.

For more info and to register: Click! FIA Surety School, Steve Golia, Director

The place for Subdivision and Contract Surety Bonds:

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

An “A Rated” Carrier

We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

Subdivision Bonds: Learn Now!

Get smarter in just 2.5 minutes!

Click on the giant brain and we will transmit information directly into your hippocampus.

https://www.fiasurety.com/public/fiadocsnew/FIA_Sub-Division_Video.mp4

Brought to you by the “Giant Brain” of Subdivision Bonds:

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950

Office: 973-541-3417

Visit our Free CE School. We’ve added new courses!

Homebuilder Blunders

Didn’t use a Subdivision Bond to secure the public improvements on your last project?

Major mess-up but it’s not too late to fix it! You can still have all the advantages (watch video) of using a Subdivision Bond by replacing the security you filed with the municipality.

Call us and we’ll tell you how. FIA Surety has supported homebuilders and land developers for more than 40 years.

FIA Surety / First Indemnity of America Insurance Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417
Visit us: www.fiasurety.com
We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

Memorial Day 2021

With Gratitude and Respect, join us in honoring our great military heroes.

The Tomb of the Unknown Soldier

Sign our national Thank You card to current service members here and abroad.

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

Visit us: www.fiagroup.com

We are currently licensed in: NJ, PA, DE, MD, VA, NC, SC, WV, TN,  FL, GA, AL, OK, TX

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

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