Interest in international commercial surety bonds has risen in several regions of the world, creating opportunities and challenges for producers, said Kathleen Mitchell, National Practice Leader for Surety at Wells Fargo Insurance Services USA, Inc
NASBP Policy Statement
“Rather, it’s treated like an extension of credit, and the debtor does not have a right to continue to rely on bonds after filing for bankruptcy without the consent of the surety. In order to induce the surety to give such consent, the debtor may offer the surety the benefit of a surety program order allowing administrative claim status with respect to any losses surety pays on post-petition claims under its bonds. This status can apply to pre-petition bonds and will assure the surety of repayment if the reorganization is successful.” An example of how a surety can successfully facilitate communication is that of Synagro Technologies
If a statute dictates other forms of security are allowed, it’s time to start a conversation about surety bonding...But if a substantial portion of the work is completed, a surety bond would not necessarily pay the full bond amount
Surety bonds on construction contracts provide critical prequalification of a bonded contractor and financial protection for the owner and certain subcontractors and suppliers. Architects who are knowledgeable about bonds are well positioned to advise owners about these premier project risk management tools
What are Surety Bonds? Who are Surety Bond Producers?