Surety Services
In order for a surety broker to add value to a relationship in today’s environment, the broker must do far more than simply deliver a bid, performance or payment bond when asked. We provide our surety clients with unique products that help them obtain their business goals. In addition we provide the following services:
Execute Bid, Performance and Payment Bonds
Update Clients with Changes in the Surety Marketplace
Today’s surety marketplace is one characterized by rapid and constant change. It seems as though everyday there are new companies entering the marketplace and those already established are constantly changing their underwriting procedures.
Given PentaRisk’s surety expertise and depth of client base we represent a diverse cross-section of the construction community and have significant relationships with all of the primary surety companies. We regularly provide our clients with information regarding rate, indemnity, work program trends, carrier financial strength, and commitment to the marketplace.
Strengthen the Surety Relationship
As a facilitator of dialogue between the contractor and the surety, we will work to assure that all lines of communication are open, that the expectations of all parties are clearly understood and that a mutual buy-in exists. Depending on the particular client’s needs, we can also use our relationships with financial institutions, CPAs, and other contractors to create partnerships that would be a benefit to the successful execution of your business plan.
Assist with the Prequalification of Owners and Subcontractors
Given the competitiveness of the current construction marketplace, management of subcontractor/specialty contractor exposures has become a key component of every project manager’s responsibilities. One easy way to transfer this risk is to require that certain subcontractor/specialty contractors be bonded. Unfortunately, many times the ultimate outcome of this request is the receipt of a bond written by a financially weak surety or a subcontractor who is incapable of producing a bond.
We can help to assure that the bonds that you are accepting are being backed by responsible surety markets, and for those instances where the subcontractors cannot secure the required bonds, PentaRisk may be able to help as well. We have established a separate unit catering to the smaller/specialty contractor and we have several primary and secondary surety markets available to write this type of business.
Subcontractor Default Insurance
Subcontractor Default Insurance is an alternative to traditional subcontractor bonding. A growing trend among Construction Managers is to purchase an insurance program that provides coverage against subcontractor defaults. Like traditional surety bonds, coverage is triggered by the subcontractor’s failure to perform their responsibilities as outlined in each respective subcontract. Unlike subcontractor surety bonds, the insured shares in the exposure through the application of a deductible and a co-participation in excess of the deductible.
Given the above, the procurement of the coverage is controlled by the Construction Manager. Premium is reduced due to both the aggregate premium volume generated by the bulk purchasing of bonds and the risk sharing that is created from the deductible and co-participation.
We would be happy to explore Subcontractor Default Insurance as an option for your firm if you are interested.