bid security

SURETY: A Question for the Ages

Steve GoliaLeave a comment

Rate or Capacity? Which is more important for contractors?

Pork Chops, only $.89 per lb!!
But sorry, we’re all out of ’em…

Surety Bonds can be like that: A great price (low rate), but they’re all out – no capacity available. So there lies the answer. An awesome bond rate is useless if the underwriter is inflexible, unresponsive, and does not provide capacity when needed.

This is where FIA Surety comes in! We are highly experienced, big-picture underwriters. Each of our underwriters has between 20 and 40 years experience. You don’t have to train us!!

When your regular underwriters “don’t get it,” give us a call for a creative response. We are true surety experts! Contract, Site and Subdivision bonds in all states.

First Indemnity of America Insurance Company
2740 State Route 10 West, Suite 205
Morris Plains, NJ 07950-1258
856-304-7348

http://www.fiasurety.com


Providing A rated, T-Listed bonds in all states!

SURETY: Solve This Challenge!

Steve GoliaLeave a comment

Real live case:

A new applicant called us today regarding a P&P bond they need for a school district project.

I asked: “How did you acquire this contract? (public work is typically bonded) Was a bid bond used? Answer: “Yes.”

He went on to explain that the bid bond provider wants his wife’s personal indemnity, which they don’t want to give. (Apparently this was not discussed in advance!) He owns the company. “She doesn’t have anything to do with it.” I assured him full indemnity is normal, and we typically require it, too.

Challenge Question: What’s the next step to help this applicant?

  • The client could go back to the bid bond provider and offer them collateral in lieu of full indemnity.
  • They could offer to sign a “Non-transfer Agreement” which prohibits moving assets between the indemnitor and the non-indemnitor.
  • If they want us to consider, we could look at those two options.
  • They could try a new agent and underwriter and may get a different response.
  • They could offer the school district cash collateral or an Irrevoccable Letter of Credit issued by a commercial bank in lieu of the P&P bond.
  • They could also offer the school district a Tripartite Agreement – which is a form of funds control.

At FIA Surety, you don’t get knee-jerk reactions. You get thoughtful responses, promptly given. We’re proud of the fact that we’ve been a highly successful “surety only” market for over 40 years. We’ve seen it all – twice!

Put our vast expertise to work and solve your client’s problems.

FIA Surety is First Indemnity of America Insurance Company, a carrier providing A rated, T-listed bonds in all states!

http://www.fiasurety.com

Increased Production

Steve GoliaLeave a comment

Ever wonder why a surety bond underwriter asks you for new business?

  • Is it because they are nosy and want to gauge your agency strength?
  • Does the surety has a loss ratio problem?
  • Has poor customer service caused the underwriter to fall short of goals?
  • Or maybe the underwriter has a sincere interest in deepening your relationship for mutual benefit.

FIA has been writing Site/Subdivision, Bid and Performance Bonds for over 40 years.  We are “A” Rated and having an excellent 2020!

“Can we help you with any new business?”

Call: 856-304-7348

FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

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

169. Changing Horses: Site & Subdivision Bonds

Steve GoliaLeave a comment

Abe Lincoln said it.  And it’s mostly true.  But here is one time when it really does make sense to “Change Horses In Mid-Stream!”

When Developers and Home Builders start a new project, they give security to the city or township guaranteeing the construction of public improvements (streets, curbs, lights, water, sewer, etc.) The security may be in the form of cash, a bank issued irrevocable letter of credit (ILOC), or a surety bond.

They’re all the same to the township, but there are huge differences for the contractor. The most obvious is the loss of use of their funds. How long will the money be tied up? It can take much longer than expected to get these obligations released (the township is in no hurry!)

If a dispute arises and cash or an ILOC was used, the township just takes the contractor’s money.  It’s all over.  With a surety bond, there is a discovery process through the claims department.  The contractor has input and may affect the outcome.

So, back to the horses.  For clients that have already posted cash or an ILOC, they can swap it out with a surety bond!  Get their money back. Gain more control. Protect company assets.  Put the cash to good use!

How to start? Call FIA Surety.  Since 1979, we have been a steady provider of site and subdivision bonds.  We do little $20,000 site bonds for commercial property owners and have written multi-multi million dollar subdivision projects.  Come to the experts to swap in a surety bond, or to write a new project. We get them done!

Read expert analysis: Why Surety Bonds are the way to go here.

Call FIA Surety: 973-541-3417

Steve Golia 
FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

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

183. FIA Surety: Turning “DUH!” into “TA-DAH!”

Steve GoliaLeave a comment

How it started: “Hi Steve, I have a strange scenario I hope you can help me…”

Our agent had a performance bond client established with a surety and the SBA program.  They needed a P&P bond for a municipal project and the surety demanded payment in advance.  The client could not comply.

The award and notice to proceed were issued and the contractor commenced with the work – but the obligee forgot about the bond, until now. The contract is completed but the client cannot receive their final payment until they file a maintenance bond.  Due to weak credit, the surety is refusing to issue unless they add additional indemnitors.  The job is finished: DUH!

We gathered a file and asked for a status inquiry form from the obligee (to confirm the degree of completion and obligee’s satisfaction with the project.)  The contractor passed along the form, but the project manager refused to complete it, stating he “never saw one of these before.” DUH #2!

We made contact with the township engineer and after a friendly conversation, were able to verify everything was OK and they promptly completed the form for our records.  We evaluated the bonding requirements and determined that the Performance bond form contained an 18 month maintenance clause (no separate maintenance bond), so the P&P bond was still needed.  FIA Surety issued it, and with no SBA support or additional indemnity required: TA-DAH!

The agent is happy.  The contractor is happy.  The township has a completed project with maintenance coverage. We bonded a job that was completed and accepted.  Now was that so hard?

FIA Surety is First Indemnity of America Insurance Company, your go-to carrier for Site, Subdivision, Bid and Performance bonds. Call 856-304-7348

Making TA-DAH moments for our clients since 1979.

FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

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

See Inside FIA Office

Steve GoliaLeave a comment

OK, that’s not really our office.  But we want to assure you – we’re here issuing bonds, underwriting new business and making new friends!

Be careful and safe like us (not like the picture!)  FIA wants to help with the surety bonds you need including Bid, Performance, Site and Subdivision.

FIA Surety: A bonding company serving independent agents and the construction industry since 1979.

Steve Golia 856-304-7348

FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

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

#170: Why Developers LOVE Subdivision Bonds

Steve GoliaLeave a comment

When developers and home builders start a new project, they must give security to the local township. This guarantees construction of the “public improvements.”

The security can be in cash, an irrevocable letter of credit (ILOC), or a subdivision bond (surety bond).

Why is a bond the best method?

  • Developers retain the use of their cash. Keep it available to acquire and finance new projects. Use it to solve problems. Remember, cash is king!
  • More control if there is a claim: They are processed through the bonding company. There is a discovery process. The developer has input and more control than with an ILOC. With an ILOC they can simply grab the developer’s money!
  • Better long term protection. These guarantees are hard to close, may drag on for years. The township is in no hurry to give up their security. It’s easy to renew the bond and you’re good for another year.

Developers and home builders love subdivision bonds – especially if they obtain them from one of the industry’s strongest players: FIA Surety. We have supported developers and home builders with subdivision bonds since 1979.

Call us for your next one or to replace existing security you have already filed.

Steve Golia, Marketing Mgr. 856-304-7348

FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

Developers and Home Builders: Important News!

Steve GoliaLeave a comment

Important news for Developers / Home Builders and their Surety Bond Agents:

“Now more than ever, you need to protect your cash position.

As you start your new project, do not use cash or a cash backed Irrevocable Letter of Credit (bank instrument) to secure your obligation to the township. Instead, file a Subdivision Bond. Preserve your capital!”

We have specialized in this area since 1979. Call us for immediate service.

Steve Golia, Marketing Mgr. 856-304-7348

FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

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

Surety Bonds: Pay Raise or Title?

Steve GoliaLeave a comment

Enjoy this scene from Cheers “Woody: Raise or Title?”

We laugh at Woody being duped.  He went after the wrong prize, just like some agents when it comes to commissions.

Agents face this choice: Commission percentage or commission dollars?

You might think a higher commission percentage automatically means higher dollars, but slow down Woody: It ain’t necessarily so! Let’s do the math.

Example 1) Bond Amount: $1,000,000

Premium rate: 2% = $20,000

Commission Percentage: 30%

Commission Dollars: $6,000  

Example 2) Bond Amount: $1,000,000

Premium rate: 2.5% = $25,000

Commission Percentage: 25%

Commission Dollars: $6,250  

Interesting! A lower commission rate can yield higher commission dollars when the premium rate is higher.  When the premium rate goes lower, the commission dollars drop even more.  A 1% rate with a 30% commission yields only $3,000 commission!

What about sliding scales?  At 30% commission, the 25/15/10 rate delivers only $4,050 in commission dollars.

OK so here’s the conclusion: Focus on commission percentage and you may end up being Senior Bartender like Woody. When calculating income, the bond rate makes you a winner!

Since 1979 FIA has been a dependable provider of Bid, Performance, Site and Subdivision Bonds.  Call us with your next one.

Steve Golia, Marketing Mgr. 856-304-7348

FIA Surety / First Indemnity of America Insurance Company, Morris Plains, NJ

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

Click in the top right corner to follow this blog so you don’t miss our next exciting article!

Godzilla Surety

Steve GoliaLeave a comment

He’s big.  And for Godzilla, that works!

But when you’re dealing with bonding companies, do you want big, or would you rather have responsive, nimble, flexible…?

At FIA Surety, we have had the same senior management staff in place since 1979.  Tons of stability and experience.  Compared to the big “monsters,” we’re a smaller surety. How does that help you?

Example: This week we got in a Site Bond, a type of bond many sureties do not support.  It was a little complicated.  The title to the property changed hands and the names on the documents didn’t match up.  It took some digging but we still approved it within a day. Why?  Because we can.

Nimble.  Responsive.

For some transactions you need Godzilla.  But for many others, you want the flexibility and willingness of FIA Surety.  Call us!

  • Bid Bonds
  • Performance and Payment
  • Site and Subdivision Bonds
  • Deposit Bonds for Home Builders

Steve Golia: 856-304-7348
FIA Surety is First Indemnity of America Ins. Co.  (a carrier)

For more cool bond stuff, follow this BLOG!