Why not internationally?

[Redbull]

I'm just curious, why can't you issue any contract bonds internationally? Is there a company that does issue contract bonds outside of the US?

[Riskwriter]

Good question.
For one thing, sureties struggle with International Law more so that in our home country here. If a claim were to arise, the surety is at the mercy of the laws and regulations of the country in which the bond was written.

Secondly, the surety will have a difficult time observing the jobs progression unless they have international branches. This is usually not the case and so job review is incredibly difficult.

I have been told that there are international markets (There must be for your Halliburtons and such.....) but I am unaware of any specific markets.

[bondman]

I'm just curious, why can't you issue any contract bonds internationally? Is there a company that does issue contract bonds outside of the US?

Yes most of the large Sureties operate internationally. AIG, Federal, St Paul Travellers, Liberty to name the major players. They all maintain international branches or companies. Any specific country you are interested in? You do however need to bear in mind that the US bond market is quite different to the rest of the world.

[Admin]

You do however need to bear in mind that the US bond market is quite different to the rest of the world.

I recall speaking to an agent from England that was telling me that there are major differences in suretyship between there and in the US. I don't want to list specifics for fear that my memory won't serve me correctly.

Any differences you can think of off hand bondman?

[bondman]

I recall speaking to an agent from England that was telling me that there are major differences in suretyship between there and in the US. I don't want to list specifics for fear that my memory won't serve me correctly.

Any differences you can think of off hand bondman?

Just looking at Contract bonds for a average construction contract where the Employer could be Local Government or a private company. We would expect to provide a conditional performance bonds in the region of 10-15% of the overall contract value. By conditional I mean payable against an established default with the value ascertained by reference to the contract. If it was offered we may provide a retention bond to secure release of any retenion monies which would be around the 3% mark.

In the US, the same type of performance bond would be issued (i.e conditional) but for 100% contract value if working for the local State of Federal Government. In addition to the performance bond a Labor/Materials Payment bond for 100% would also usually be required (as a result of the Miller Act (1935 i think)). There are instances where a 50% bond has been accceptable but the driver behind that was partly the reality that large bonds were not available on the US market due to the Sureties restricting capacity.

There is also a large market for on demand bonds (similar to Standby Letters of Credit) internationally although generally these are handled by the banks rather than Surety companies. Again percentage wise they are around the 10% contract value mark unless covering repayment of Advance Payments or Retention releases.

[Admin]

Great post bondman! Extremely knowledgable, as always.

Are you from the U.k.? If not, where did you learn about suretyship outside of the US?

[bondman]

Great post bondman! Extremely knowledgable, as always.

Are you from the U.k.? If not, where did you learn about suretyship outside of the US?

Yes, UK, working for a large multi national company so deal all over the world including the US.

The updated website looks much nicer by the way

[Admin]

Yes, UK, working for a large multi national company so deal all over the world including the US.

Ahhhh, that explains your vast knowledge . Is it an agency or surety?

The updated website looks much nicer by the way

Thank you. We are working hard on bringing our parent site up to date as well. Hopefully it will be done sometime this month.

[bondman]

Ahhhh, that explains your vast knowledge . Is it an agency or surety?.

Actually neither. I work for a construction/engineering company.

[Admin]

Actually neither. I work for a construction/engineering company.

You had me fooled. I must say, I am thoroughly impressed with how much you know about surety bonding.