Lance Surety Bond Associates, Inc.

Like many industries in our economy, the U.S. construction market has taken a hit as a result of the recent credit crisis. Many constructions projects throughout the country have either stopped or been slowed down, and subsequently, the construction bond portion of the surety bond market has seen changes as well. Specifically, perhaps the greatest change to the construction bond market is the level with which underwriters of surety bonds scrutinize the cash flow, or financial health, of contractors seeking surety bonds for their businesses.

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On 9 January 2009, the Wichita Business Journal reported that the Wichita-based Martin K. Eby Construction Company Inc. and Liberty Mutual Insurance Company entered into a surety bond program with one another. This deal comes after a roughly four-year period where Eby Construction Co. was unable to purchase the contract surety bonds required in order to work on certain government projects. This inability to obtain surety bonds came as a result of a number of significant losses on jobs in both the states of Texas and Florida. Eby was forced to sell their operations in TX and FL.

In October of this past year (2008), Eby made the positive announcement that they were on the verge of regaining their ability to obtain surety bonds. A significant settlement in a lawsuit with one of their Dallas-based customers may have been the catalyst for this favorable turn of events.

Now that Eby Construction Co. has begun a surety bond program with Liberty Mutual, the company should soon be able to conduct work in the public sector. Additionally, Eby announced that they will be able to place bids to do work on certain profitable jobs in the private sector that they had previously been unable to bid on due to their inability to obtain surety backing (via surety bonds). Two of the private sector jobs mentioned by the Wichita Business Journal were Via Christi Health System and Cessna Aircraft Co.

In July 2008, North Carolina House Bill 2463 was passed, and contained a number of changes to the state

On 9 October 2008, Pennsylvania Governor Ed Rendell signed 10 bills into law, one of which, Senate Bill 1019, pertained to Pennsylvania Recreational Vehicle (RV) Dealers.

The two major takeaways from SB 1019 are as follows:

1. Any person who wishes to act as an RV dealer in the state of PA is required to purchase/post a $30,000 license bond (a type of commercial surety bond). This is obviously only required of RV dealers that have not already posted a license bond with the Pennsylvania Department of Transportation (PennDOT). The license bond is required by RV dealers to ensure they comply with all the pertinent laws and regulations in the state.
2. SB 1019 (PA) also gives the Pennsylvania State Board of Vehicles the authority necessary to discipline out-of-state RV dealers that choose to violate Pennsylvania law.

On 1 July 2009, California State Assembly Bill 180 will become operative, and will set forth tighter laws governing the state

In July 2008, in response to an extreme drought and in an effort to more efficiently use the precious resource, water, the General Assembly of North Carolina passed House Bill 2353 (Senate Bill 1795), short title

Legislation was recently passed that now places Alaska-based mortgage bankers and mortgage brokers under the direct regulation of the state

I recently posted an article on the two major categories of surety bonds: Contract Bonds and Commercial Bonds. However, another much smaller yet significant category of surety bonds are Court Bonds. While this category of bond does not make up as much of the surety bond market as the previously mentioned categories, it is important to understand what they are, and the primary types of surety bonds that fall under court bonds.

In a nutshell, court bonds are a form of surety bonds that are required in many court proceeding in order to allow litigants to engage in the requisite legal proceedings. They can ensure that a person has the necessary protection from possible loss that could come about as a result of courts outcome. Court bonds can also guarantee that a person assigned as a fiduciary carries out his/her duties in accordance with the terms of an agreement or the orders of the court.

Here are the most common types of Court Bonds:

• Appeal Bonds - Required by a court before any appeal is made.
• Guardianship Bonds - These types of bonds ensure that legal guardians of minors or incapacitated individuals will not misuse any funds that are supposed to utilized to support that individual. (also known as Custodian Bonds)
• Probate Bonds - Bonds that are required by the court to guarantee the proper distribution of assets by the executor of an estate whenever an person passes away or becomes incapacitate. (also referred to as Estate Bonds, Executor Bonds, and/or Fiduciary Bonds)

For many new to the world of surety bonds, the renewal process can be slightly surprising. The purpose of this post is to shed light on the timing of renewal payments in order to prevent unnecessary confusion. Typically, invoices for renewals of surety bonds are sent to the principal months before their surety bond expires. Additionally, payments are due months prior to the bond expiration date as well. While some principals may prefer to hold off on paying for a renewal until the day the bond expires, that is not how the process works.

The language of surety bonds requires bonding companies to collect renewal premium payments well before bond expiration. For instance, each surety bond will have a

To understand surety bonds, and how they work, it is best to start off by breaking them down into larger groups or categories. There are two major categories of surety bonds: Contract and Commercial Bonds. In this article, I will briefly explain what each of the previously listed bond types guarantees, and will also provide you with a few examples of each.

The first category of bonds I will discuss are contract bonds. Contract Bonds are purchased by a contractor (or principal) from a surety at the request of a project owner (obligee), and essentially provide obligee with assurance that the principal will perform in accordance with the terms of the contract (i.e. complete the work, pay subcontractors, material suppliers, etc.).

Examples of Contract Bonds: