Blog

The outlook for surety in Canada is healthy, but a number of developments are introducing increased risk that need to be taken into account and properly managed, speakers suggested during the Toronto Risk and Insurance Education Forum last week in downtown Toronto. Likely, “80% or so of the bonds issued are these approved (by Canadian Construction Document Committee, CCDC)...

Many owners, particularly large corporations or public entities, require contractors to provide a labour and material payment bond to ensure that sub-trades are paid and (hopefully) avoid protracted payment disputes. A typical labour and material bond creates a tri-partite relationship among the principal (the contractor who is being bonded), the surety (the bonding company) and the trustee or obligee...

The outstanding results of the surety industry over the last 10 years are beginning to make some buyers question the value of surety bonds. However, there are dynamics going on in the construction industry and commercial markets that indicate the need is greater than ever for their use. For decades, the construction industry did not see the pace of...

Arch Coal will use traditional insurance to guarantee that nearly $400 million in cleanup work eventually happens at its Wyoming mines, according to a restructuring plan approved Tuesday by a federal bankruptcy judge. The plan moves the coal giant away from self-bonding, a contentious practice that allows companies to forgo traditional insurance for cleanup, backing up their promise to...

Business insurance provider Federated Mutual Insurance Company has reached an agreement to acquire Granite Re, an Oklahoma-based provider of surety bonds for small to medium-sized contractors. According to Federated Insurance, the acquisition better positions Federated Insurance to partner with commercial contractors for their surety and bonding needs. Jeff Fetters, chairman, president and CEO of Federated Insurance Companies, said: “Having...

A number of professionals in the financial field across the U.S. undergo their required licensing procedure via the National Multistate Licensing System and Registry (NMLS). As the NMLS is introducing a new system for submitting and managing surety bond requirements, it’s important for businesses to get acquainted with the electronic surety bond (ESB). The new method for collecting and...

WASHINGTON, D.C. — A surety company is not bound by an arbitration provision in a subcontract because the provision clearly only encompassed claims between the engineering company and its subcontractor, a District of Columbia federal judge has ruled. In applying a heightened standard of “clear and unmistakable evidence,” Judge Tanya S. Chutkan of the U.S. District Court for the...

In the past six months the surety bond market has developed significantly for insurers in China, said Richard Chu, specialty lines, financial risks, Asia-Pacific, PartnerRe. “It’s a new product in China mainly for construction sector,” he said. “Previously most of the construction companies had to go to banks for surety products, but in the last six to eight months...

A new contractor has been chosen to finish Dunkin’ Donuts Park, and work is expected to resume next week, an Arch Insurance official said Wednesday. The new contractor will be Baltimore-based Whiting-Turner Contracting Co., which has extensive experience in building sports venues, said Patrick Nails, a senior vice president with Arch Insurance, the company guaranteeing completion of the ballpark....

Examining new BOEM supplemental bonding requirements for OCS decommissioning obligations: Part 4 In context of the Bureau of Ocean Energy Management’s new NTL 2016-N01, the recently in force Notice to Lessees and Operators in the outer continental shelf (OCS) laying out strict new financial demands of operators and leaseholders to cover decommissioning liability on the OCS, Oil & Gas...