Secrets of Bonding

Correct identification is important when browsing the forest for edibles – maybe even crucial!

What about in bonding? Not being able to identify a bond may not be life threatening, but it won’t improve your career health either.

Here’s one that can be challenging, but we’ll give you the keys!

Contract / Performance & Payment Bond vs. Site or Subdivision Bond

Identify a Site or Subdivision Bond:

• The obligee / party requiring the bond is always the local municipality
• There is never a written construction contract between the municipality and the bond applicant
• The bond applicant is not being paid to perform the work guaranteed by the bond. The applicant is self-funding the project (may have obtained a construction loan.)
• The subject of the bond is always site work such as installing water and sewer lines, stormwater management, roads and sidewalks, landscaping, traffic & safety, signage, parks, etc.
• “Vertical construction,” such as residential structures, are never the subject of the bond.
• There is often no specifiied completion timetable
• Bond amount can be reduced as work proceeds
• Typically, bond does not cover claims by suppliers of labor or materials

With this expertise you can guide your client appropriately and select a responsive surety carrier – one that has aggressively pursued this business for more than 46 years: FIA Surety.

Brilliant!

Take your chances, or make the smart move – 

call the EXPERTS! It’s that easy…

Oh wait, there’s more: Check out our accredited Free CE courses, Zoom webinars you can attend from home or office. Our webinars are wildly popular, free and there are no exams. 3 credits each. Click for info and to register.

FIA Surety / First Indemnity of America Ins. Co., a Palomar Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-402-1200
A Carrier Providing Contract, Site and Subdivision Bonds up to $10,000,000!

Processing bond opportunities may be easy. But sometimes we get a…

Tough Nut!!!

Let’s face it, MOST surety opportunites exist because a problem needs solving. Agents and their carriers known as Problem Solvers are a magnet for new business. That’s why this most recent FIA Surety Success Story is relevant.

What does a tough nut look like when underwriting surety?

Details:

• The applicant is a site contractor in business over 10 years.
• They have negotiated a sizeable new private contract with a repeat customer.
• The contractor has a surety program through another agent, but is seeking better terms. They have a high premium rate and also pay for funds control.
• Personal and company credit reports are weak.
• Most recent fiscal year end: Profitable with low net quick and negative net worth.
• 2025 recent interim company financial statement shows profitable operations with low net quick and negative net worth.
• $10 million work program needed. Internally prepared financial statements.
• Current work on hand includes two large contracts less than 50% complete.
• No indication of available bank credit.

How can we enable our agent to win this client’s business? What would YOU do?

The applicant has a good track record, but is obviously under stress at the moment. The file does not justify a low rate – so that’s not the hook.

In order to support our agent and this client we need an element of financial control on the contract funds.

The FIA Surety solution:    

1. Joint checks    2. An adjustment to the contract retainage clause, and    3. A condition in the bond regarding the release of funds!    The client will also engage a CPA.

These procedures eliminate the escrow fee while protecting the surety and help prevent payment bond claims.

Brilliant!

Call us when your next bond pops up! It’s that easy…

Oh wait, there’s more: Check out our accredited Free CE courses, Zoom webinars you can attend from home or office. Our webinars are wildly popular, free and there are no exams. 3 credits each.

Click for info and to register.

FIA Surety / First Indemnity of America Ins. Co., a Palomar Company
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-402-1200

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

Our next FIA Surety Free CE Zoom webinar is coming up on Monday, 11/3/25, 1:00-4:00pm eastern. We’re presenting Surety Bonds 101, worth 3 free CE credits. Get ’em!

Register once for all our monthly programs: Click!

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:

“Taming the Tariff Monster!”

40 years.

That’s how long we’ve served this valuable client. The company is an interior contractor. The children of the founders have expanded the business, and we’ve been their strong partner throughout.

So along comes their next surety bond need, a sizable contract (more than $5 million.) It’s normal work for them, and the size is a jump up, but we can roll with that.

The contract is to supply special materials originating in a foreign country. We reviewed all the details and there was no provision to account for the potential effect of tariffs on the material costs. We brought this up to the client, “This could be an issue.”

Initially, the response was “Don’t worry about it…” But our senior management did, and so the conversation continued. Eventually our client agreed. Tariffs could be an issue, but how to solve?

FIA Surety tackled it head on. We asked for a meeting with the project owner. They told us, “That’s your problem.” But we held firm. The prospect of a tariff was beyond our client’s control. Nobody disputes a force majeure clause, and this was no different. We hammered the point: The contractor should not be expected to absorb such price increases if they occur.

Tame the Beast

After a month of negotiations, the owner relented and an escalation clause was added to the contract. Was our client pleased with the FIA intervention? Yes, because the tariff rate was later established at 50% – a huge burden that would have been a crushing blow.

FIA is a surety only carrier you can depend on when your clients need thoughtful approvals, efficiently provided.

Oh wait, there’s more: “FIA Free CE”Our 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.

November 3, 2025, Monday “Surety Bonds 101” 1:00 pm to 4:00 pm Eastern time.
Click for info and to register.

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!

Sometimes you don’t want to trust your fate to a beginner. You know the feeling – like you’re training them!

It’s like that with Subdivision Bonds. Developers want expertise and efficiency in the handling of their surety bonds. So where do you get it?

FIA Surety has been a consistent provider of these bonds for more than 45 years straight. We’re not newbies, not experimenting. FIA Surety has written $ hundreds of millions of these obligations, with confidence and certainty. Is that the caliber of quality you demand for your clients?

Call us when your next site or subdivision bond pops up. We handle them all including multi-million dollar subdivision projects! 973-402-1200

FIA Surety, a carrier providing A rated, T-listed bonds in all states up to $10,000,000.

P.S. Check out our Free CE School. We’ve added more states: 
https://fiasurety.blog/2020/08/16/free-ce/

FIA Surety, a Palomar company http://www.fiasurety.com
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

What would you do with this case? A little bit tough, but we put it together for our agent!

Details:

1. A bid bond is needed for an upcoming opportunity, estimated contract amount $3,500,000.
2. Client’s largest prior, completed contract was $2,100,000. New project is 66% larger.
3. The client is new with our agent and they never obtained any sizable bonds, only credit based approvals. File is not set up for surety credit at the desired level. A $3.5 million contract typically requires CPA Reviewed financial statements on the % of Completion accounting method.
4. Only has internal company financial statements on the Accrual accounting method.
5. Contract includes contaminated soil removal/transport/disposal. Many sureties are unable to support such projects due to licensing requirements, insurance, and other limitations.
6. Soil removal is subcontracted, 22% of the total contract, NO subcontract P&P bond provided. Such a bond would have protected the principal from failure of the subcontractor to perform a significant (crucial) aspect of the project.
7. Client has a major hung receivable over 9 months old. This takes a bite out of their net worth – an important underwriting factor. It pushes their Debt to Equity ratio unfavorably and makes them less qualified for bank credit. When, if ever, will they collect the funds?
8. Client already has a substantial backlog of work, two million dollar projects just started.
9. What would you do with this one?

How FIA Surety supported it:

1. Company and personal credit reports were strong.
2. NQ, NW, D:E, NP all looked acceptable on the year-end statements.
3. Open WOH projected good profits
4. Recent interim company FS was strong
5. Contract was normal work and location for applicant
6. Personal FS added to the picture
7. Company showed good longevity and stability
8. They explained their game plan to collect the hung receivable by the end of the year.
9. Subcontractor was a major company the principal has good experience using previously
10. Client was very cooperative furnishing info to support their company FS.
11. The bank likes them and their credit line is 100% available.
12. Nine month contract, no special bond forms.
13. Client will upgrade to a CPA Review at the next FYE.
14. The principal and subcontractor both carry pollution insurance.
15. Quarterly WIP schedules to monitor their profitabity and runoff. Program is full for now.
16. Full indemnity, no collateral or escrow required.

This case didn’t need a magic wand to make it writable. We needed to grind out the details. We’re taking the client into new territory on the job size and the technicality of the underwriting. Our agent was a great facilitator – really kept things moving (we love that!)

Conclusion: Our agent aquired a new client. We delivered… and did so promptly.

Do you want this kind of flexible underwriting and processing speed for YOUR clients? We’re your “Go-To Carrier” for T-listed bonds in all states. Contract, Site and Subdivision Bonds up to $10,000,000.

P.S. Check out our Free CE School. We’ve added more states: 
https://fiasurety.blog/2020/08/16/free-ce/

FIA Surety, a Palomar company http://www.fiasurety.com
2740 Rt. 10 West, Suite 205
Morris Plains, NJ 07950
Office: 973-541-3417

“Introductory Concepts in Intermediate Policy Administration: A Recap”*

It was Brutal!!
But hey, it doesn’t have to be like this…

Actual comment from the 10/1 FIA Surety Free CE Webinar on Ethics:
* the class was great as always!! thank you for everything you do Steve! See you next month!!

FIA, a carrier that is your strong partner providing more than 7,500 free CE credits and solving your surety bond problems – I mean opportunities, with speed and creativity.

Our 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.

November 3, 2025, Monday “Surety Bonds 101” 12:45 pm to 4:10 pm Eastern time.
Click for info and to register.

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.
* Ficticious course title

You LIKE to waste money? No, of course not.

That’s why all your people attend the FIA Surety Free CE Zoom webinars.

• Convenient: Attend from home or office
• Fun & Interesting: People keep coming back, we’ve delivered thousands of hours of Free CE!
• Free! You get that part…

Click for more info and our “once and done” registration form or paste this address into a browser: https://fiasurety.blog/2020/08/16/free-ce/

Next webinar is on Wednesday, October 1, 2025, 1:00 pm to 4:00 pm Eastern time, Zoom CE class. 3 credits, No exam. 

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!

We Solved It!!

Steve, here is the story. FIA Surety provided the requested bid bond based soley on indemnity – we rarely require collateral or funds control.

Details:

• Operating under current ownership for 9 months
• Year company started: 2018
• Negative net quick on 12/31/24 year-end financial statement
• Also negative net worth
• And lost money for the year…

So how did we do it? We supported the case based on the following:

1. Our highly capable agent knows them well and recommended our support.
2. The credit reports were not weak despite the poor FYE results.
3. The internal, mid-year statement showed improvement
4. They are holding an excessive amount of equipment and will raise capital by selling unnecessary items
5. The owners have loaned money to the company (a sign of good faith)

OK, you caught us thinking on the job. Guilty as charged!

We’re your “Go-To Carrier” for T-listed bonds in all states. Contract, Site and Subdivision bonds up to $10,000,000.

P.S. Check out our Free CE School. We’ve added new states: 
https://fiasurety.blog/2020/08/16/free-ce/

FIA Surety, a Palomar companyhttp://www.fiasurety.com

Actual comments from our 8/1/25 FIA Surety Free CE webinar, “Work In Process Schedules – Own Them!”

• I very much enjoy the program. Especially that the viewers are able to ask questions and serious time is spent in discussing the questions and making sure the answer is given and explained
• A great program! I learn so much and it’s great hearing the comments from ppl in the industry.
• Always informative and Steve keeps it interesting and engaging. So nice to have an offering of CE credits in Surety

“Engaging…” Was the last CE class you attended engaging? People say ours are!!!

For more info and our “once and done” registration, click or go here:
 https://fiasurety.blog/2020/08/16/free-ce/

More good news: We’ve added California, Massachusetts, Arizona and Ohio to our Free CE program. Tell your colleagues to sign up!

This is a free service of your “go-to” carrier for Contract, Site, and Subdivision Bonds up to $10,000,000: FIA Surety, a Palomar company

http://www.fiasurety.com