performance

[curdog]

If signing personally for corporate performance bond, and all personal assets at risk, is there a customary fee to me for signing?

[Admin]

I am not sure what you mean by a fee for signing...Please clarify.


The surety bond industry as a whole is almost always requiring personal, spousal, and corporate indemnity on all bonds issued.

[curdog]

I am an officer of a corp getting a surety bond. I am providing personal assets as collateral. Is there a customary fee the corp should pay me to provide the collateral?

[marietta68]

Originally Posted by curdog

I am an officer of a corp getting a surety bond. I am providing personal assets as collateral. Is there a customary fee the corp should pay me to provide the collateral?

Underwriters assume you have an interest in your company's ability to be bonded, thus when dealing with closely held companies, personal indemnity is necessary. I've never come across a situation in which an indemnitor received a "fee" or any other type of direct compensation in return for signing individually. However, if you've actually given cash collateral to secure your bond line of credit, perhaps your accountant can help you structure a fee that wouldn't have an adverse affect on the company's financial statement. As an example, company owners will sometimes purchase an airplane in the name of another entity and then lease it back to their company. However, it would be wise to review the by-laws of your company to determine if such an arrangement would be possible. Quick answer is, no, personal indemnitors aren't compensated for their guarantee because they're deriving benefit from the ability to obtain the bonds, but if it's your company, you and your Board of Directors can do whatever you want.

[Admin]

A very well thought out answer Marietta! You truly are an asset to this site and the surety industry as a whole.

[marietta68]

You're too kind~