Commercial Surety Fundamentals

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Commercial Surety Fundamentals - an online course, has been reviewed and approved by all states' licensing boards for Continuing Education credits.

The purpose of this course is to provide a thorough orientation to commercial surety compared with other forms of insurance and to give instruction on how to attend to the details of commercial surety bonds at all relevant stages. The focus is on the key elements of commercial surety and includes legal requirements, underwriting processes, participant roles, and risks. The course describes the required financial information and explains why and what should be collected and reviewed and how this information is used. The student will be introduced to the key factors in successful conduct including working with bonds, proven management principles, and the ethical standards and expectations of a professional.

COURSE DETAILS

Chapter 1 – Commercial Surety Fundamentals

  • What Is a Surety Bond?
  • The History of Suretyship in the United States
    • Federal Government
    • Organizations That Support the Industry
    • Industry Regulation
    • Industry Capacity
  • Surety Fundamentals
    • Basic Laws
    • Surety Compared to Insurance
    • Role of Reinsurance
    • Role of Co-Surety
  • Contracts
    • Competent Parties
    • Agreement/Acceptance
    • Consideration
    • Lawful Object
    • Prescribed Form
    • Contract Completion
  • Surety Bond Fundamentals
    • Parties to the Bond
    • Duties of the Parties to the Bond
    • Duties of the Principal
    • Characteristics of the Surety Bond
  • Two Major Classes of Surety Bonds
    • Contract Bonds
    • Commercial Bonds

Chapter 2 – Evaluating Risk and Exposure

  • The Underwriting Process

  • Identifying the Risk
    • Risk Transfer
    • Statutory vs. Non-Statutory Obligations
    • Understanding Bond Forms
    • Optional Terms and Conditions
  • Understanding Terms and Conditions
    • Underlying Statute and/or Contract
    • Onerous Bond Conditions
    • Penal Sum of the Bond
    • Aggregate Liability
    • Cumulative Liability
    • Successive Recovery
    • Open Penalty
    • Forfeiture Clause
    • Liquidated Damages Clause
    • Fines and Penalties 
    • Third-Party Liability Clause
    • Adverse Selection Clause
    • Extended Term Clause
    • Cancellation Provisions
    • Risk-Based Classifications
  • Evaluating the Principal’s Qualification to Perform
  • Indemnity Agreements/Applications
    • Why Take a Signed Application or General Indemnity Agreement?
    • Common Law Rights
    • Contractual Rights
    • Basic Rules for Proper Preparation
    • Third-Party Indemnity
    • Legal Entities and Indemnity
    • Powers of Attorney/Authority
    • Underwriting Authority

 Chapter 3 – Underwriting the Principal

  •  Collecting Needed Information

    • Regarding the Principal
    • Regarding the Obligee
    • Regarding the Bond
  • The Application Process
    • Understanding the Obligation
    • Securing the Application
  • Underwriting the Principal/Business
    • The Three Cs of Surety
  • Underwriting the Credit History
    • The Role of Credit Agencies
  • Understanding Financial Statement Preparation
    • Auditing Standards
    • Common Accounting Terminology
    • The Independent CPA
    • Understanding the Auditor’s “Opinion”
    • The Certified Audit
    • Auditing Procedures—The Certified Audit
    • Compilations
    • Accompanying Notes
  • Financial Statement Analysis—The Science of Underwriting
    • The Financial Statements
    • Analysis Methodologies
    • Ratio Analysis
    • Balance Sheet Ratios
    • Debt Ratios
    • Current Liabilities to Inventory Ratio
    • Long-Term Solvency
    • Income Statement Ratios
    • Measuring Profitability
    • Analysis of Cash Flow
  • Securing and Releasing Collateral
    • Types of Collateral
    • Documents Required
    • Release of Collateral

 Chapter 4 – Professional Bond Agency Responsibilities

  •  Surety Bond Execution

  • Modifying a Bond
    • Surety Bond Riders
  • Renewing or Extending a Bond
    • Continuation Certificate
    • Renewal Bond
    • Verification Certificate
  • Changing a Bond to Reflect Modifications to an Underlying Agreement
    • Consent of Surety
  • Canceling a Bond
  • Understanding the Commercial Surety Claims Process
    • Receiving a Claim
    • Handling a Claim by the Surety
  • The Professional Surety Bond Producer
    • Understanding What Is Expected
  • Understanding the Agent’s Role in Marketing the Surety Product
    • Commitment to Customer Service
  • Marketing and Selling the Commercial Surety Product
    • Why Market Commercial Surety Business?
    • Developing a Commercial Surety Business Plan
    • Know the Commercial Surety Marketplace
    • Developing a Business Plan
Each chapter concludes with review questions for students to gauge how well they are mastering the content. On completion of the course students demonstrate their comprehension of all the material by taking a final, online examination.

The course content for Commercial Surety Fundamentals was developed by members of the NASBP Commercial Surety Committee under the leadership of Lynne Cook, Senior Vice President at Early, Cassidy and Schilling, Inc. Ms. Cooke and Mr. Paul Amstutz, Chief Operating Officer at The Gray Casualty & Surety Company were the lead authors of the course, receiving contributions and assistance from members of the committee.

CONTINUING EDUCATION CREDIT
 
Course availability and approved credit hours will vary by state and is subject to change. This list is provided for reference only and CE hours listed are not guaranteed. CLICK HERE to confirm the current credit hours available for your state.



Continuing Education Credit Hours*
Alabama - 10 hours Louisiana - 10 hours
 Ohio - 6 hours
Alaska - 10 hours Maine - 10 hours Oklahoma - 7 hours
Arizona - 10 hours Maryland - 10 hours Oregon - 10 hours
Arkansas - 10 hours Massachusetts - 7 hours
 Pennsylvania - 10 hours
California - 8 hours Michigan - 10 hours
 Rhode Island - 10 hours
Colorado - 10 hours Minnesota - 5 hours
 South Carolina - 10 hours
Connecticut - 10 hours Mississippi - 8 hours South Dakota - 7 hours
Delaware - 10 hours Missouri - 10 hours Tennessee - 10 hours
Florida - 8 hours
 Montana - 10 hours
 Texas - 10 hours
Georgia - 10 hours
 Nebraska - 10 hours Utah - 10 hours
Hawaii - 10 hours Nevada - 10 hours Vermont - 10 hours
Idaho - 10 hours New Hampshire - 10 hours Virginia - 10 hours
Illinois - 10 hours New Jersey - 10 hours
 Washington - 5 hours
Indiana - 10 hours New Mexico - 10 hours West Virginia - 10 hours
Iowa - 10 hours New York - 9 hours
 Wisconsin - 8 hours
Kansas - 7 hours North Carolina - 10 hours
 Wyoming - 10 hours
Kentucky - 10 hours North Dakota - 10 hours Washington D.C. - 10 hours
 
* Adjuster and Public Adjuster CE hours are also available in those states that require them.

This course is available as a training course for anyone at anytime. Please note that if you take the course for training purposes and later wish to receive continuing education credits for it, you will have to re-purchase the course.

Priced at $189, the course can be taken by the students at their own pace within a twelve month period.

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The National Association of Surety Bond Producers is the association of and resource for surety bond producers and allied professionals. It is solely dedicated to the needs and interests of surety bond producers and serves a membership with personnel of over 5,000 surety agents and brokers. NASBP producers engage in contract and commercial surety production throughout the United States, Puerto Rico, Guam, and a number of countries. 

The National Association of Surety Bond Producers (NASBP) has partnered with WebCE, a leading nationwide provider of Continuing Education for insurance professionals to provide Commercial Surety Fundamentals. 

WebCE® is the leading insurance continuing education provider in North America. It delivers over a half million online courses annually, and offers the largest nationwide catalog of courses approved to satisfy state-specific subject requirements.