In Search of Individual Sureties

[Wondering Willy]

We are a new, National Environmental & Demolition Contractor, (in other words, 'standard' sureties don't like us for the 'standard' reasons).

We are looking for Individual Sureties who are willing to look at a higher risk, and write Bid, Payment, and Performance Bonds on a National basis, (or at least the North East). The Owners and Corporate Officers have over 25 years experience in the industry, and have successfully completed over $400M of work. the new company does have a three year track record, excellent credit, and has completed two bonded jobs. We are now looking for a bond line in the $7.5M range.

Is there a Listing, or Association, or Directory of Individual Sureties?

We have been to most of the 'standard' markets, and get the 'standard' declinations, therefore we recognize our situation for what it is, and don't want to waste anyones time chasing something that will not likely bear fruit.

[Agent Bond]

Wondering Willy,

I "wonder" what obligees would accept the individual suretyship that you seek? Have you discussed this idea with the projects owners you are trying to work with? I would be very surprised if any would accept a personal surety to guarantee your performance. For a surety to provide you with a $7.5 million work program, they would have to have at least 10 times that in net worth I'm sure.

A better option for you might be to explore using a surety that specializes in environmental risks. There are a few out there such as AIG Environmental but I'm not sure of thier minimum net worth requirements for their contractors, etc.

If you would like for me to investigate this for you, send me your contact info at *EDIT*

[ClaimsGuy]

Fewer and fewer owners are accepting individual sureties so you may want to confirm with potential customers that this is a useful endeavor.

While I have in the past been involved with individual sureties, I know of none now or any association (and I doubt there is one).

Have you looked into ACSTAR Insurance, New Britain, CT?

[Riskwriter]

I am however aware of an individual surety which has been making some headway as of recent. They are a little unique as they (unlike standard surety) have a pool of liquid assets in which they back each bond they write dollar for dollar.

This is different with standard surety as the company uses its assets to cover a much larger aggregate risk. If a standard surety had all of their bonds had a claim simultaneously, they would not be able to recover and payout on all those bonds. As such, standard sureties are more conservative with underwriting.

In addition, this market is unique as they DO have re-insurers.

They do not require collateral in most instances (like Acstar does) but their rates are much larger than standard surety as well. If you are interested…let me know.