late claim

[jw8]

I was involved with a company that was forced to close for financial reasons. One job that was partially completed was a bonded job. A vendor had not submitted invoices for materials supplied for the job 10 months earlier. Upon hearing that the company was closing they submitted invoices for the materials dated within the 90 day period of their claim to the bonding company although the material was delivered much earlier. The bonding company paid the claim and is now seeking compensation under the general indemnity form. The general indemnity form was never signed by the surety and no resolutions for bonding were ever executed by the company. Was the surety roght in paying the claim of the vendor?

[Surety Queen]

Originally Posted by jw8

I was involved with a company that was forced to close for financial reasons. One job that was partially completed was a bonded job. A vendor had not submitted invoices for materials supplied for the job 10 months earlier. Upon hearing that the company was closing they submitted invoices for the materials dated within the 90 day period of their claim to the bonding company although the material was delivered much earlier. The bonding company paid the claim and is now seeking compensation under the general indemnity form. The general indemnity form was never signed by the surety and no resolutions for bonding were ever executed by the company. Was the surety roght in paying the claim of the vendor?

First off - the Surety doesn't sign the general indemnity agreement - only the contractor. On the surface, Surety was within their rights to file a claim. However, you bring up a number of factors that could affect this situation. Best to contact the claim department of the Surety or your attorney.

[marietta68]

Originally Posted by Surety Queen

First off - the Surety doesn't sign the general indemnity agreement - only the contractor. On the surface, Surety was within their rights to file a claim. However, you bring up a number of factors that could affect this situation. Best to contact the claim department of the Surety or your attorney.

Just a little "heads up": some companies, my own included, do have a signature line for the surety. Ours won't be signed unless a claim is submitted and it becomes necessary to record the indemnity agreement with the secretary of state of the company's home office as a security instrument. At that point, a corporate officer will affix his signature and the indemnity agreement will be recorded, exactly like any other security recording filed in that state.

[Surety Queen]

Originally Posted by marietta68

Just a little "heads up": some companies, my own included, do have a signature line for the surety. Ours won't be signed unless a claim is submitted and it becomes necessary to record the indemnity agreement with the secretary of state of the company's home office as a security instrument. At that point, a corporate officer will affix his signature and the indemnity agreement will be recorded, exactly like any other security recording filed in that state.

Hmmm... we must be using different companies. I think only one of our large surety companies actually signs agreements. Never seen it - but then again, we don't get involved in claim situations so maybe they are signed and we just never see them. Thanks for the heads up... appreciate it.