top of page

Construction

Bond Producer vs. Surety Advisor: Beyond the Bond

Published on
Written by:
October 7, 2016
Cottingham & Butler

When you're looking for a solid bonding relationship, shouldn't it be built on a complete risk review and not simply on a complete financial review? 


Sure, your financials are strong, but they can be misleading or downright unreliable if your surety team hasn't gone beyond just delivering a bond.


Imagine facing an uncovered loss with a full backlog and no money to prosecute the work. It's bonded work and that means the surety must step in and complete it; you didn't forget you personally indemnified that bond, did you?


Imagine facing a serious loss where your limits were adequate to your company's net worth 3 years ago but haven't contemplated that new $4,000,000 in revenue you've added since then. Are you a bigger target at $6,000,000 revenue than you were at $2,000,000?


You've bonded these jobs, and you've produced a clear, contractual financial guarantee in which you are fully indemnifying the surety both corporately and personally. When you set those insurance limits, didn't at least part of that calculation take into consideration the corporate veil, your protections personally against liability?


Of course they did. Did you adjust those limits when you took on a project which, through that personal indemnity pierces the veil and leaves you personally exposed?


This is piercing the veil from the inside. You may not experience a loss that can break through the veil head on but an uncovered loss or a loss with inadequate limits can wreak havoc on current operations and leave you staring down the barrel of a sizeable bond loss. You might enjoy personal protection from the veil on the insurance claim but what if that claim wipes out the working capital in your company? The surety still has your personal indemnity option to complete that work and pay those subs on your behalf. How's that veil doing?


In most cases, it's not that one swift blow. It's usually a long-term effect of your company under siege where you and your senior management lose focus on critical day-to-day management and new growth as your energy and money pour into defending what you've built. Performance, morale, cash flow, revenue..... the spiral can be awful.


We have the experience and the rounded team who will provide this in-depth review. The people who are not merely up-to-date on emerging risks but up-to-date with how fluid those risks are when considered by a company heavily involved in modern construction.


The Bond Producer will get you the bond and call it a success and, yes, we do that too. We "get the bond" every day, and most days, on an hourly basis.


The Surety Advisor delivers that bond along with these and other critical services that should be the standard, but we all know aren't.


From clients just starting out and in search of their first $300,000 bond, to firms with over 100 years in contracting and bond lines in excess of $150,000,000, we have the experience, team, and drive to deliver beyond the bond.

TAGS:

Upcoming Events

Webinar

June 3, 2025

Lower Your Risk of Strategic Cargo Theft & Improve Your Bottom Line as a Verified Carrier

Fraud and double brokering are rampant, but that doesn't mean you're powerless to stop it. In this expert led webinar, discover practical strategies to protect your shipments and strengthen your supply chain security through partnership with thoroughly vetted carriers. Learn how Verified Carrier's comprehensive vetting process confirms carrier identity, equipment ownership, and operational credentials. Our presenters will walk through each verification checkpoint, providing real-world examples that demonstrate why these safeguards are critical in preventing fraud and unauthorized brokering.
Register Now!

Webinar

May 21, 2025

Motor Carrier
Safety 101 Series / Overview of Part 395 Hours of Service & Accident Factor

Do you have time to review all 395.1-38 and the FMCSA's guidance material? Would you feel prepared and confident if notified of an audit? Join Justin Smoot as he discusses part 395 of the FMCSR's Hours of Service of Drivers and Factor 3 of a Compliance Review. Justin will help attendees identify deficiencies in their fleet's Hours of Service (HOS) program while preventing roadside inspection violations. He'll analyze industry data and benchmarks to evaluate your fleet's performance, highlighting both strengths and areas for improvement. Additionally, Justin will provide guidance on calculating your fleet’s Accident Rates and address common challenges in accident documentation.
Learn More!

In-Person

May 22, 2025

Better Every Day Regional Seminar / Pewaukee

Join us at The Ingleside Hotel in Pewaukee, WI to stay updated on today's rapidly evolving employee benefits landscape. As we navigate a new administration, groundbreaking AI developments, and rising healthcare costs, this SHRM/HRCI accredited event delivers essential insights for HR professionals. Beyond the comprehensive learning sessions, you'll enjoy networking opportunities with fellow HR leaders during breaks and a provided lunch, making this a truly valuable day of professional development. Register now to save your spot today – spots are limited!
Register Now!

Connect with a C&B Representative Today!

bottom of page