PowerPoint Presentation

Understanding Construction/Surety Bonds & Expanding Your Companys Bond Program

By: Scott MahorskyA surety bond is a written agreement where one party, the surety, obligates itself to a second party, the obligee/owner, to answer for the default of a third party, the principal/contractor.

What is a Surety Bond?SuretyContractorOwnerBid Bond

Performance & Payment

Maintenance

Others Supply, Subdivision, Judicial, Mining, etcTypes of Surety BondsAgent

Execution

Role

Where Do I Get a Bond?Surety Bonding CompaniesLarge Markets

TravelersCNAArchLibertyZurich

Small/Medium Markets

AegisCapitolHudsonIFICNAS Surety

Surety Bonding CompaniesDiffering Sizes

Large Sureties = Larger Contractor

Smaller Markets = Smaller Contractor

Preferences

Federal Work

State Work

Subdivisions

Commercial Surety

Character

FinancialsHow Do I Qualify?

Work In Progress (WIP)

Completed Contracts

Bank Line of Credit

Experience/Work HistoryResumes of Key EmployeesJob ReferencesAwardsHow Do I Qualify?Working Capital

Equity

Total Bond Program

Cost to CompleteRatiosQuality of Agent Makes DifferenceAgentRelationship with SuretiesTechnical AbilityFocus on SuretyUnderstands Federal MarketplaceSuretiesTrack RecordOverall - LossesResumesHow to Maximize Your Bond ProgramConstruction Accountants & Financial Reporting

Project Types & ProfitabilityIDIQSATOCMATOC/MACC

Build a Team

Construct a Long Range Plan/Strategy

How to Maximize Your Bond ProgramProfits

Letters Better Opportunities

Less Dependence on Large Contractors

Benefits of Maximizing Bond ProgramEconomy

Increased risk for owners, contractors & sureties caused by current economy

Continued disciplined underwriting, exposure management & project analysis

More competition, fewer projects

State of Surety MarketplaceMergers

State of Surety Marketplace

Questions