Bonding Opportunities—Resources for Educating Private Owners about Surety Bonds

It seems like every week I read statements from economists giving their prognostications about the percentage chance of the economy going into recession. Rising inflation, slowing employment, tariff impositions, supply chain disruptions, stock overvaluations, AI bubble fears, political partisanship, among other factors, are some of the risks resident in the current business climate. Not surprisingly, “volatility” and “uncertainty” are words in the frequent lexicon of business pundits and leaders. Businesses understandably hunger for policies and strategies that offer the opportunity for better certainty now and in the future, including the ability to plan for, mitigate, and, if appropriate, transfer business risks. This desire for certainty in a changing business climate may constitute an opportune and, perhaps, unprecedented moment in which private owners and lenders are more willing to listen to the merits of surety bonds for their construction projects, as evident risks and uncertainties certainly outweigh associated costs.

Over the years, NASBP has produced many resources to help surety professionals emphasize the importance of and make the case for surety bonds to public and private construction owners. The Be Guaranteed to Succeed® Campaign expressly was for that purpose. The Campaign website housing short videos and many explanatory materials, including the Producer’s Communication Toolkit, is accessible from NASBP.org at https://www.nasbp.org/get-a-bond/be-guaranteed-to-succeed. Much more assistance is available, however. NASBP published “Managing Project Risks Through Surety Bonds: An Overview of the Importance of Surety Bonds for Architects and their Owner Clients,” available at https://www.nasbp.org/wp-content/uploads/2024/11/NASBP_Managing_Projects_Final.pdf, the brochure, “Answers to 32 Questions Public and Private Owners Ask About Contract Bonding,” available at https://www.nasbp.org/wp-content/uploads/2024/11/32Q_NASBP_8-18_newadd.pdf, and the two-page flyer, “9 Things Savvy Owners Should Know About Surety Bonds,” available at https://www.nasbp.org/wp-content/uploads/2024/11/NASBP_9_things_final.pdf.

NASBP website blogs, the Surety Bond Quarterly magazine, NASBP Virtual Seminars, and Let’s Get Surety podcasts also are treasure troves of information for and resources to surety professionals to aid in convincing project owners. For example, see the SBQ article, “Why Private Construction Jobs Are Requiring Surety Bonds, Too,” (https://www.suretybondquarterly.org/2022/06/30/why-private-construction-jobs-are-requiring-surety-bonds-too/), the NASBP blog, “Why is a Performance Bond a Project Owner’s Best Friend?” (https://www.nasbp.org/resource/why-is-a-performance-bond-a-project-owners-best-friend/), and the NASBP podcast episode #110, “Unlocking the Mysteries of Surety Bonds for Owners and Other Decision-Makers” (https://letsgetsurety.org/episode/110-mysteries-surety-bonds-owners-decision-makers/).

And, please do not forget about the significant findings in surety industry studies (links or information about them reside on the NASBP.org website) supporting the value of bonding. Approximately nine years ago, the Surety Association of Canada commissioned the Canadian Centre for Economic Analysis to examine the impact of surety protection on the Canadian economy and individual Canadian provinces and showed the economic benefit of bonding (https://www.suretybondquarterly.org/2018/04/26/canadian-study-verifies-surety-protection-has-economic-value/). A summary of a recent follow-up study will be reported in the Surety Bond Quarterly next year. Building on the original Canadian study, the Surety & Fidelity Association of America commissioned Ernst & Young to evaluate the economic benefit of surety bonding in the US, finding substantial positive impacts (https://surety.org/suretyprotects/).

Those who successfully make the case for bonding private projects also are eligible for industry recognition for their efforts. The Tiger Trust award, a prestigious annual award jointly sponsored by NASBP and SFAA, recognizes those producers and underwriters who convince private owners to protect their projects with payment and performance bonds. A who’s who of distinguished surety industry leaders have won the award over the years. More information about the Tiger Trust is available at https://www.suretybondquarterly-digital.com/sbpq/0319_fall_2019/MobilePagedArticle.action?articleId=1520992&lm=1761071884000#articleId1520992.

The present time might be the perfect time to make the case for surety bonds on private projects. I hope the above-cited resources assist you in doing just that.