Surety Bonds

What Is a Surety Bond?

Quite simply, surety bonds reduce the risk a construction project will not be completed. They're required in the healthcare contruction industry. A contract surety bond, a two part instrument including a Performance Bond and a Payment Bond, provides assurance to the project owner that a contractor is capable of completing a project according to contract specifications, ensures timely completion of a project, and guarantees the contractor will pay laborers, and material suppliers, so that the project will be completed lien-free.

Who Requires Bonds?

All pubic works contracts are bonded, as mandated by Federal, State and local laws. However, bonds are also required on many privately financed projects to ensure project completion. And, General Contractors, as well as the Surety Underwriter, may require bonds from critical path subcontractors in order to mitigate their risk.

Why Get Bonded?

Being bondable qualifies you for a larger number of projects than your non-bondable competitors. Your ability to bond assures owners, general contractors, lenders, architects and others that you have the financial strength and relevant experience to successfully complete your construction project.

How Do I Get Bonded?

The first step is in selecting the right agent. Professional Surety Bond Agents have greater market access to surety underwriters and a much better understanding of the underwriting process. Your bond agent should be able to provide guidance and recommendations which, when incorporated, raise your bond capacity while lowering rates.

Where Do I begin?

Start by contacting John Daley, Area Senior Vice President-Surety, at john_daley@ajg.com, 925-953-5250, or 415-505-5276 (cell).

Visit our website at http://www.cic-ins.com/ and http://www.ajg.com/

About California Insurance Center

California Insurance Center (CIC) was acquired by Arthur J. Gallagher & Co. Insurance Brokers of California, Inc. (AJG) in September 2008.

AJG/CIC maintains key relationships with executives of all major surety companies, which means we can maximize your surety capacity with the best possible terms and conditions. We have the expertise and the ability to bond difficult situations, in which a contractor may have been previously turned down. We work with you to understand the requirements of a contract and establish a secure surety relationship.

For more information:

For a guide on understanding surety bonds, go to

http://www.sio.org/html/studyguide.html

Or send an email to: john_daley@ajg.com