3 Surety Organizations Every Contractor Needs to Know
Surety bonds are an integral part of the construction industry, especially for projects funded by the government. Surety bonds assure the owner of a construction project that a project will be completed and all parties entitled to payment will be compensated fairly for their work. At Cotney Attorneys & Consultants, our Tallahassee construction lawyers have witnessed firsthand how effective surety bonds are at keeping projects on track. Whether you need to acquire a bid, performance, or payment bond, a Tallahassee construction lawyer can ensure that you are following the proper procedures to acquire the necessary bonds to proceed with construction legally.
Understanding the bond process is important, but it’s not the only thing contractors should be aware of when dealing with surety bonds. Familiarizing yourself with important surety organizations is a worthwhile endeavor for any contractor that wants to increase their knowledge of surety bonds or build connections in the surety industry. In this article, a Tallahassee construction lawyer will discuss three surety organizations at the vanguard of this important industry. These organizations work as the bonding agent (literally) between private contractors and public works initiatives.
1. The Surety Information Office
Established in 1993, the Surety Information Office (SIO) is a centralized source for surety information. SIO publishes and disseminates information relating to surety bonding and its benefits. This information covers both private and public construction. Keep in mind that, although surety bonds are legally required for all public works projects, they can still be utilized to safeguard private projects against abandonment. Technically, SIO is considered a “virtual office.” It is supported by the National Association of Surety Bond Producers (NASBP) and The Surety & Fidelity Association of America (SFAA).
Related: How to Prevent Surety Bond Claims
2. National Association of Surety Bond Producers
Founded in 1942, the National Association of Surety Bond Producers (NASBP) is the “association of and resource for surety bond producers and allied professionals.” NASBP not only provides surety bonds for construction contracts but other purposes as well. Even individuals can be bonded through the NASBP. The reach of the NASBP extends beyond the continental United States to Puerto Rico, Guam, and other countries. Their unparalleled knowledge of the surety marketplace, business strategy, and various underwriting processes makes them a trusted advisor for all those who work with surety bonds.
Related: Surety Bond Misconceptions
3. The Surety & Fidelity Association of America
The Surety & Fidelity Association of America (SFAA) deals with suretyship on a global scale. As a District of Columbia nonprofit corporation, its member companies are responsible for furnishing the majority of surety and fidelity bonds in the United States. This organization is licensed in all states, the District of Columbia, and Puerto Rico. Furthermore, SFAA has achieved the title of statistical agent for reporting fidelity and surety experience by state insurance departments.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.