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Surety Bonds 101

Surety Bonds 101. The Basics of Bonding. Surety Bonds Vs. Traditional Insurance. What is Surety Bonding?. Principal. Obligee. Surety. Types of Surety Bonds. Bid Bond Performance Bond Payment Bond. Types of Surety Bonds. Bid Bond Performance Bond Payment Bond. Types of Surety Bonds.

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Surety Bonds 101

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  1. Surety Bonds101 The Basics of Bonding

  2. Surety Bonds Vs. Traditional Insurance

  3. What is Surety Bonding? Principal Obligee Surety

  4. Types of Surety Bonds • Bid Bond • Performance Bond • Payment Bond

  5. Types of Surety Bonds • Bid Bond • Performance Bond • Payment Bond

  6. Types of Surety Bonds • Bid Bond • Performance Bond • Payment Bond

  7. Prequalification Capacity Financial Strength Company History Organization Continuation Plans References Work In progress

  8. Common Perceptions

  9. Benefits of Bonds Financial Security Construction Assurance

  10. WhyDo Contractors Fail?

  11. Factors Beyond Control Economic Downturn Inflation Failure Weather Delays Site Conditions Labor Difficulties Materials Shortages

  12. Contractor Failure Risks Low profit margins Onerous contracts Slow collections Unreasonable owners RISK Insufficient Capital High Materials prices Shortage of qualified, skilled workers

  13. Contractor Failure Risks Inadequate Management New Owner Change in Scope of Work Over Expansion RISK Sub Failure Materials Shortages Inclement Weather

  14. Contractor Failure Accounting issues Management issues Personnel issues Performance issues Failure Unrealistic growth

  15. Accounting Issues • Inadequate cost tracking systems • Estimating or procurement problems • Underinsured • Improper accounting practices

  16. Tips for Contractors To Avoid Default • Construction-oriented CPA • Adjust overhead • Bank credit • Conserve capital • Bond subcontractors Contractors

  17. Surety Bonds and Insurance Coverage for Small and Emerging Contractors 817-226-4311 – Local 866-226-4311 – Toll Free

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