By: Craig F. Martin of Lamson, Dugan & Murray, LLP There are fundamental differences between insurance and surety bonds and knowing the difference will help you avoid making mistakes, should claims arise. This blog will discuss the differences between insurance and surety bonds. Insurance An insurance policy is a two party contract between an insurer and the insured. The policy is intended to protect the insured. The cost of insurance is calculated by the insurer based on … [Read more...]
Archives for 2015
Minnesota Light the Night Walk
On Sunday, October 25th, Goldleaf Escrow Fund Control Administrator Jan Sachariason and her husband Robb participated in the Light The Night Walk at Mall of America in Bloomington. The Light the Night Walk is a fundraising campaign benefiting The Leukemia & Lymphoma Society and their funding of research to find blood cancer cures. There are several ways to participate in the Light the Night event. Walkers can raise funds as an individual or on a team with friends and family. There are … [Read more...]
Importance of Providing Notice to the Surety Company
By: Craig F. Martin of Lamson, Dugan & Murray, LLP A recent case out of Missouri emphasizes the importance of providing notice to a surety when a bonded subcontractor is in default. When the question of whether a surety is obligated under the bond is in the balance, notice is crucial. In CMS v. Safeco Insurance Company, Safeco provided a performance bond to a subcontractor for the benefit of CMS. The bond specifically provided: PRINCIPAL DEFAULT. Whenever the Principal … [Read more...]
Surety Bonds and Bank Letters of Credit Comparisons
By: Jack Anderson, President This is the final post in a series of blog posts where we have been exploring surety bonds and bank letters of credit – what each is, their differences, as well as advantages and drawbacks of each. Today, we are going to discuss the advantages and drawbacks to both a surety bond and a LOC. Let's start with the advantages: Surety Bonds Since the creation of the surety bond does not go through a bank or financial institution, a surety bond can free … [Read more...]
Surety Bonds and Bank Letters of Credit Comparisons
By: Jack Anderson, President This is the 3rd post in a series exploring surety bonds and bank letters of credit – what each is, their differences, and advantages and drawbacks to each. What is the expected cost of each instrument? For a surety bond, cost is generally 0.5% to 2% of the contract price. A bond is project specific and covers the duration of the contract. The cost of the bond is included in the contractor's bid price. For a bank LOC, the cost is generally 1% of the … [Read more...]
Surety Bonds and Bank Letters of Credit Comparisons
By: Jack Anderson, President This is part 2 in a series of blog posts where we will continue to explore surety bonds and bank letters of credit – what each is, their differences, and the advantages and drawbacks with each. How is each obtained? The contractor obtains the bond through a surety bond agency or a surety bond producer such as Goldleaf Surety Services. The contractor obtains the LOC through a banking or lending institution. What is your borrowing capacity with … [Read more...]
Surety Bonds and Bank Letters of Credit Comparisons
By: Jack Anderson, President Over the next several blog posts, we will explore surety bonds and bank letters of credit – what each is, their differences, and the advantages and drawbacks to each. Let’s start with a basic definition for each. A surety bond is a three-party agreement between the surety company, the oblige (project owner), and the principal (the contractor). A performance bond protects the owner from non-performance and financial exposures should the contractor … [Read more...]
Troublesome Contract Clauses: Change in Terms
The final troublesome contract clause we will look at in this series is the Changes in the Work clause. A contract change occurs when an event or condition modifies the work as defined in the contract documents. Changes may include: Additions to or deletions from the work to be completed Changes in the materials specified Corrections in the specifications or drawings Acts or omissions of other contractors or trades Departures from the contract schedule Changes affecting the … [Read more...]
Goldleaf Surety’s 2015 Scholarship Winner
Goldleaf Surety Services would like to introduce our 2015 scholarship winner - Andrew Peters. Andrew will began his college career this fall at Gustavus Adolphus College in St. Peter, MN . Since 2010, Goldleaf Surety has been presenting $500 scholarships to Montevideo High School graduates who will generally be pursuing a degree in a business related field. Goldleaf Surety has been honored to present these scholarships to local high school students to assist them in pursuing their college … [Read more...]
Goldleaf Surety Holds Its Summer Outing
Goldleaf Surety staff took some time away from work on Friday, July 17th to enjoy some fun in the sun. We were treated to lunch and a relaxing afternoon on a beautiful Minnesota Lake. Those of you who don't live in Minnesota will find it hard to truly appreciate how much we look forward to these fleeting summer days after our long, cold winters! Goldleaf Surety's President Jack Anderson was our cook - with assistance from our Vice President Brenda Risa - for the amazing noon lunch. We enjoyed … [Read more...]