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 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...]

Avoiding Surety E & O Claims – Part 3

By:         Jack Anderson, President of Goldleaf Surety Common Surety Handling Misstep No. 6: Failure to Adhere to Conditions & Exclusions of Line of Authority.  In instances where a surety has extended a line of authority to an agent and the agent has issued a bond that falls outside the line of authority, the agent will be held accountable for any loss a surety experiences as a result of the agency mishandling its authority. Ways to Avoid Surety E&O Claim:  Train all associates on … [Read more...]

Avoiding Surety E & O Claims – Part 2

By:         Jack Anderson, President of Goldleaf Surety This is a continuation for my June 11th blog. Common Surety Handling Misstep No. 3: Failure to Deliver Bid Bonds in a Timely Manner or to a Proper Address. Bid bonds sent via regular mail run the risk of being delivered late.  Regular mail might be less costly up front, but could end up being very expensive in the long run when a client misses a bid date due to late delivery.  This could also result from someone in your office using an … [Read more...]

Avoiding Surety E&O Claims – Part 1

By:         Jack Anderson, President of Goldleaf Surety Many insurance agents are not aware of special issues in the handling of surety bonds that could cause problems for their agency and their clients.  If an insurance agent accepts the responsibility of placing a bond, the client automatically expects that the agent has adequate and authoritative knowledge.  In addition, professionals are being held to higher standards of conduct and these dynamics combine to create an increased likelihood … [Read more...]

Goldleaf Surety Attends 2013 Capitol Club

Goldleaf Surety was invited again this year to attend Capitol Insurance Companies’ Capitol Club. The Capitol Club represents Capitol Insurance Companies’ 35 most profitable agencies across all segments of the company in 2013. This year’s event was held at Casa Del Mar Hotel in San Diego, CA. Representing Goldleaf Surety were Jack Anderson, President and Brad Koosmann, Account Specialist. The event included many exciting site-seeing opportunities, as well as an Awards Reception and Dinner … [Read more...]

Small Surety Bonds Fast! Quick! Easy!

Not all that many years ago, small contractors and their insurance agents were told that they had to have CPA-prepared financial statements and certain financial ratios in order to get bonding - and that is generally still true today.  However, under Goldleaf's Short Cut Bond Program, we work with a variety of sureties who use the personal credit scores of the company owners as their main underwriting criteria on smaller bonds.  Generally, the owners' personal credit scores need to be around 650 … [Read more...]

What is a Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Bond?

Medicare Bonds, often referred to as DMEPOS Bonds, are mandatory for manufacturers and suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).  The Centers for Medicare & Medicaid Services (CMS) published a final rule titled, "Medicare Program: Surety Bond Requirement for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)" in the Federal Register on January 2, 2009.  This final rule implemented Section 4312(a) of the Balanced … [Read more...]