Surety Bonds in the 2000s

Today’s Surety Market
As the surety market balanced out in the mid-2000s, the underwriting process became more streamlined.  Contractors now know what to expect when applying for a surety bond.

A surety bond is a type of credit, indicating that the surety company “guarantees” that the contractor is “worthy” financially and has enough experience to proceed with a project.  Therefore, the surety company has the right to require a certain amount of documentation from an applicant in order to make an informed decision to grant a bond.

Below is some of the crucial information that surety companies will most likely require.  As a surety bond producer, our job at Surety is to help guide you through these steps.

•    Business financials – Financial statements for the last three to five years will be required.  Usually that means copies of Revenue/Expense statements, Cash Flow statements, and Balance Sheets.  Some surety bond companies will require that these statements are prepared and signed by a CPA.  If the applicant is a new company, the most recent financials will be required, as well as possibly a copy of the new company’s business plan.

•    Current owner’s personal financial and credit statements
– All owners of the construction company with a 5% or more ownership may be required to provide personal financial statements and credit history.  Why are personal credit and financials important?  A surety company may require personal indemnification from the construction company’s owners in the case that they default on a contract.  That means if the company goes under, the owners will still personally pay the financial responsibility of the construction bid contract.

•    Owner’s resume – In order to determine whether a contractor is capable of completing a construction bid on time, on budget, and meeting all requirements, a surety company may require the construction company’s owner(s) to provide their resume of experience.  This will help the surety company decide whether the contractor is a high or low risk if a surety bond is issued.

What happens after all this information is submitted to a surety company?  If all information is complete and accurate, then the construction company or contractor can expect to hear back generally within 48 hours.  Surety companies know that time is of the essence in some construction projects, and as long as both parties cooperate with information, a surety bond can be issued in a reasonable time.

We hope you found this information helpful and we look forward to earning your business at Surety

Read more:

Surety Bonding in the 1990s

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About the Author Administrator
At, our #1 goal is to get our clients bonded quickly, easily and accurately at the best price possible. We're passionate about putting people first, growing through education, and innovating and simplifying the bonding process. We want our customers to have the tools to make an informed surety bond purchase.