GRANT THORNTON LLP’S
2005 SURETY CREDIT SURVEY FOR CONSTRUCTION CONTRACTORS

The Surety Information Office (SIO) has augmented the results of Grant Thornton LLP’s 2005 Surety Credit Survey, which examined the bond producer’s perspective of the surety marketplace for the construction industry, with insights from top surety company personnel. Since Grant Thornton’s last survey was produced in 1996, the marketplace has changed dramatically.

Through the mid- and late-1990s, contractors were able to get bonds without much difficulty or restriction. Today, however, the surety market is recovering from record losses resulting from aggressive underwriting policies in the late 1990s and the declining economy of the early 2000s.

The end result? A tight market with strict underwriting criteria and higher premiums.

Findings from Grant Thornton LLP’s 2005 Surety Credit Survey show how the economic environment affects–and will continue to influence–contractors, what factors bond producers consider important to obtain surety credit, and how contractors can improve their ability to obtain credit in the current marketplace.


Competitive and Economic Environment

Competition is the name of the game in construction. The construction marketplace, regardless of capacity or available jobs, is a highly competitive environment where companies are tempted to underbid and over-promise to win contracts.

According to the survey, nearly half (47%) of the bond producers surveyed described the construction marketplace’s current competitive environment as “about the same” as a year ago, while 21% say it is better. Almost one-third (31%), however, characterize the competitive environment as “worse” than the recent past.

Grant Thornton survey respondents predict a brighter economic outlook in the near future. The majority (56%) of responding surety bond producers say that in 2004 the economic environment improved over the prior year or two for construction companies and 66% say the environment will improve in 2005.

John Welch, president and CEO, CNA Surety, says, “The climate appears to be improving in regard to availability of work. Nearly all sectors are showing gains. The downside is that in some markets, labor and material shortages are becoming a problem. Subcontractor coverage is also problematic in some areas.”

James Altman, chief underwriting officer, Chubb Surety, adds, “Some construction sectors will show improvement, but state budget issues are still weighing heavily on the market.”
Tim Mikolajewski, vice president contract surety with Safeco Surety, offers the most optimistic viewpoint on the economic environment for construction in the coming year: “We see it as good with a trend towards extremely good.”

While local and state governments are decreasing the number of new jobs they undertake, an upswing in opportunities in the private sector should continue to fuel not only the opportunity for growth, but also competitiveness in the construction marketplace.

Respondents to the survey indicate that the quest to use capacity may also be stimulating competition for financially stressed contractors. On average, respondents report that 15% of contractors are experiencing “unusual financial hardship.” Surety bond producers most often cite “low profit margins” (64%) as a major cause of the difficulties faced by financially distressed contractors in today’s market.

According to the study, low profit margins were also the leading cause of financial difficulties cited in 1996 (45%), but for very different reasons. In the mid-1990s, work was abundant. Contractors tried to get higher margins, but couldn’t because they encountered difficulty in both managing the volume of work and finding qualified laborers and supervisors. Today, the market is coming out of a trench and contractors are bidding low to get enough work to utilize available capacity, thereby intensifying competition.

Dennis J. Perler, president, Liberty Mutual Surety, says, “Diverse factors have increased the risk of doing business for contractors: increased project risk due to onerous contracts and highly demanding owners, unanticipated costs of higher material prices eroding finances and reduced availability of qualified trades due to demand.”

William Cheatham, president of Zurich’s surety unit, sees financial problems stemming from “the same historical reasons that contractors in difficult situations have encountered, which include inadequate net worth and working capital, and operating on low profit margins. While sureties can identify these problems and share the information, it is not their role to solve them. Surety companies are in the business of extending credit, and like other institutions in this area, are looking for financially sound clients.”

Regarding their own market, surety bond producers are fairly comfortable that demand will be the same or increase over the next three years. More than one-third (35%) see the demand for bonds increasing and 42% say demand will stay the same.

Henry W. Nozko, Jr., president, ACSTAR Insurance Co., notes, “The demand for bonds will increase during the next three years. The billions of dollars of losses paid by the surety markets during the last few years would have been dollars lost by obligees. As a consequence, demand for bonds is on the rise. The cost of a surety bond as compared to the guarantee provided remains to be an inexplicable bargain.”

According to CNA’s Welch, “The demand for bonds should increase in line with growth in the construction industry. We may also see increased use on the private side as lenders become more concerned about select overheated markets.”

Bond producers are not quite as united in their thinking about bond supply. They are almost evenly split regarding how much aggregate surety capacity will be available in the next three years. This was not the case in 1996 when more said surety capacity would increase (1996- 42% vs. 2005 - 32%), providing further evidence of the market changes since 1996’s “boom time” for surety bonds.

This shift in available capacity may be a result of surety company consolidation or of surety companies and reinsurers leaving the marketplace. As a result of periods of record losses over the past several years, there are fewer surety companies (and reinsurers of surety credit) making bonds available to the construction industry. In the past two years, however, some new reinsurers have entered the surety market, adding to available capacity and enabling sureties to reduce the risk they retain.

Construction Surety Credit Availability

Consistent with the changed marketplace since 1996, 49% of surety bond producers say it is difficult for their construction clients to obtain surety credit, compared with 14% who said it was difficult in 1996. On the opposite end of the spectrum, 12% say it is easy to obtain surety credit today, while 58% felt the same in 1996.

However, looking at respondents’ expectations for the near future paints a somewhat more optimistic picture. More than one-quarter (27%) anticipate that it will be easier to obtain credit for their clients next year. Six in 10 (58%) of the bond producers anticipate that the ease or difficulty of obtaining surety credit will not change next year, while only 12% anticipate that it will be more difficult next year.

Safeco Surety’s Mikolajewski explains, “For financially strong contractors, surety bonds will be readily available. For those that have struggled financially or not shown commitment to building their companies financially, obtaining surety bonds is and will continue to be challenging.”

The ability to obtain surety credit for construction clients may depend on the type of project in which the contractor is engaged. Three-quarters (78%) of the bond producers say it is challenging to obtain bonding for hazardous waste projects. About three in 10 respondents say that petrochemical (34%), telecommunication (31%) and powerplant (28%) projects are difficult to bond.

According to ACSTAR’s Nozko, “We view petrochemical and powerplant projects as more difficult to bond than hazardous waste projects. However, all are problematical for good reason. One solution to providing more bonds for these classifications is to restructure bond forms and construction agreements to mitigate the exposure of the surety to a more practicable level of risk, while providing real protection and coverage for the bond obligee. We have had several successes in this regard during the last several months.”

Edward J. Heine, executive vice president, Payne Financial Group, and president of the National Association of Surety Bond Producers, points out, “Environmental/hazardous waste projects are difficult to bond for several reasons. There are legal liability issues that may broaden the liability of a surety under their bond. The class requires a specialized approach and there are only a few underwriting companies that have the dedicated resources for this market. Those that do participate appear to be profitable and provide much needed capacity. Powerplant projects are typically large, multi-year jobs with broad contractual liability. Surety capacity is available for this class. Underwriting standards are high, and the market is limited to a few surety companies that have the expertise and appetite to serve the needs of the contractors that specialize in this arena.”

About half of the bond producers surveyed report it is easy today to obtain surety credit for projects in the areas of water/sewer (43%), heavy/highway/transportation (45%), commercial/industrial (46%), and government (50%).

These findings are consistent with the general marketplace perception that the smallest and largest construction companies inherently come with more risk. This is because smaller companies can lack established business processes and larger ones can generate large claims.

The outlook is different for medium-sized contractors, however. Almost two-thirds (62%) say there will be no change to the ease of obtaining bonding. The expectations of medium-sized contractors are rosier than those of smaller or larger contractors because they typically offer more diversity in the scale and scope of projects.

Liberty Mutual Surety’s Perler says, “In today’s market, sufficient surety capacity is always available for qualified, experienced and well-capitalized contractors. Some stress remains at the high and low end of the capacity ranges with limited surety capacity available for entry-level contractors with programs less than $5 million and larger contractors with programs in excess of $250 million. At both ends of the capacity range, those contractors that can demonstrate superior capabilities and non-leveraged financial conditions are better positioned to obtain surety capacity. The tight surety market makes it more important for a contractor to chose a strong surety, remain close to its surety underwriters, and protect the relationship by being open and candid.”

NASBP’s Heine adds, “The outlook for the near future for all industry segments is stable. A solid financial condition that supports a contractor’s business plan will be the most critical factor in obtaining surety credit. For the largest of contractors, future consolidation could have an impact on industry capacity. However, we see efforts being made to attract new capacity to meet the capacity requirements of the marketplace.”

Construction Surety Credit Requirements

Construction companies seeking surety bonds in 2005 may encounter more roadblocks than they did in 1996. To help guide construction companies through the process, bond producers are doing more legwork and advising contractors on steps to take to become more bondable.

• The strength of the balance sheet and financial statement presentation are frequently identified as important to bonding companies (98% and 97%, respectively). Bond agents are united in advising their clients to prepare proper financial statements (95%), regularly produce interim financial statements (94%) and use certified public accountants familiar with the industry (92%).

• A history of successful projects (81%) and consistent profitability (78%) are considered important, and many respondents are advising clients to develop business plans (53%) and reduce overhead expenses (50%).

• The reputation of the contractor is widely seen as important to getting credit (66%), and agents often tell their clients to communicate potential problems early (82%) and improve the frequency and the quality of job status reporting (78%).

• Experience in a specific geographic area is identified as important to obtaining surety credit (59%), and four in 10 (41%) bond producers advise their clients limit their entry/expansion into new geographic areas to avoid overextension of company resources in unfamiliar territories.

Chubb’s Altman emphasizes three key points to improve surety capacity: “First, contractors should work with an agent or broker who brings added value to the purchase process, such as market and industry knowledge. The producer should be able to offer invaluable advice and insights into how to build capacity. Second, it’s important to evaluate the surety, taking into consideration the management, financial results and long-term viability. Third, contractors need to build a solid balance sheet and track record of success.”

According to William A. Marino, chairman and CEO of Allied North America, “In the currently tight surety marketplace, the contractors that are most successful with their surety partners are the ones that leave nothing to chance. They have a clearly defined business plan that is discussed regularly with their surety and all deviations from this plan are carefully measured. They know their costs, and given the strength of financial controls in place, are capable of compiling accurate forward-looking financial projections. Their actual results consistently track favorably to the communicated projections. The recurring theme here is that the most successful contractors surround themselves with professionals that are capable of supporting the information needs of their planning process and also provide the necessary guidance to accurately quantify risk and the exposures inherent in the construction business.”

Three-fourths of surety bond producers in the survey also report that sureties required personal guarantees in the past year. This is further reinforced by the seven in 10 (72%) respondents who say more than 80% of bonding arrangements require personal indemnification. In the next three years, 58% anticipate personal indemnification requirements will remain at current levels, while 35% expect requirements will become more demanding.

According to CNA Surety’s Welch, “We do not see the need for personal indemnity lessening over the next few years. Larger, well-capitalized companies may have the ability to obtain bonds without personal indemnity. However, each case will stand on its own.”

This sentiment is echoed by Zurich’s Cheatham. “There may be some cases where the capital investment is adequate to avoid the need for personal indemnity. However, indemnity is viewed as a reflection of a contractor's confidence in his or her own company, and sureties want to extend credit to contractors with consistent successful results.”

Respondents to the Grant Thornton survey indicated that size appears to affect the requirement for personal indemnification. Bond producers who have a larger percentage of small clients more often report that personal indemnification is required.

Conversely, when a major portion of their clients are larger contractors, these agents are less likely to report that sureties require personal indemnification.

Conclusion: Dotting the “I’s” and Crossing the “T’s”

During the surety market of the mid- and late 1990s, contractors were able to obtain surety bonds without much difficulty. In 2005, however, the surety marketplace is on the cusp of recovering from the after-effects of years of record losses, repercussions from Sept. 11, 2001, and the economic downturn of the late 1990s and early 2000s.

As a result, surety bond producers and surety company personnel are guardedly optimistic about future bond capacity and demand, but foresee a future that will continue to be challenging for contractors.

Today’s more rigorous underwriting processes have led bond producers to not only guide construction companies through the process, but also to provide advice on how to become more bondable.

To position themselves as attractive candidates in a still tight bonding market, sureties are urging construction companies to achieve internal efficiencies, report consistent profitability and create an environment of effective project management. Contractors that have the appropriate processes in place to communicate accurate and timely information–both good and bad–to sureties have an advantage over those who do not. Most importantly, construction companies must produce solid, complete and properly presented financial statements.

Companies with less-than-pristine past records may have more difficulty obtaining surety credit. Presenting a surety with a statement that reflects a past problem that has been resolved, however, is less damaging than a statement that includes current financial uncertainties.

Although some clouds of uncertainty continue to hover over the surety market, surety bond producers foresee a brighter future ahead. As the market improves, construction companies have the opportunity to dot the “i’s” and cross the “t’s” on their business processes and financial statements to make themselves more attractive to sureties today and in the future.

To obtain a copy of the full text of Grant Thornton LLP’s 2005 Surety Credit Survey for Construction Contractors, visit http://surveys.gt.com/formprocess/surety.asp.

Henry W. Nozko, Jr., President
ACSTAR Insurance Co.
We view the longevity and continuity of a construction company, its shareholders and management as the most important qualifier for surety credit, followed by experience with similar type projects, experience with location and project size. Analysis of a company’s financial information completes the process. To improve their surety capacity, I would recommend a construction contractor build a long-term relationship with its surety market. One close and solid functioning relationship is worth more than a thousand promises of more and cheaper bonds.

William A. Marino, Chairman and CEO
Allied North America
The continued consolidation of the surety industry has placed greater pressure on those remaining in the business to support the needs of the contractors that have been displaced by these exiting carriers. Simply stated, there is no viable market for “contractors with a story” that is capable of providing meaningful capacity. The force at work here is survival of the fittest. The sureties with the strongest books of business will be able to generate the returns necessary to receive the continued financial support of their corporate parent. Underwriters are unwilling to support surety programs for firms that could potentially negatively impact the results of their respective books of business.

Geoffrey Heekin, Managing Director
Aon Surety
There appears to be no reason to suggest that the surety market will be any less discerning with regards to the extension of surety credit during the foreseeable future. Surety credit must be extended in a more disciplined, cost-effective manner than it has before. In order to provide adequate liquidity and scale in the risk-capital community to support surety risks, pricing must evidence a greater appreciation for the risk/reward quotient that exists in the construction industry.

While the surety underwriting process contemplates a variety of variables, the most critical remains the proven operational capabilities and adequate financial resources to operate the business with minimal reliance on outside funding.

James Altman, Chief Underwriting Officer
Chubb Surety
The surety industry parallels the construction industry and both are very cyclical. Overall, 2004 surety results were poor or marginally profitable and there is some concern that there may be more departures from the market if unfavorable results continue. There is a need for positive results based on profitability and pricing, as well as solid underwriting standards. While some aspects of these underlying drivers have improved in recent years, more will have to be done.

John Welch, President and CEO
CNA Surety
The surety industry continues to be under the microscope of those who invest in it. The industry obviously needs a good run of moderating loss activity, but realistically also needs more rate adjustments and a further paring back of costs. Whether this can be accomplished is yet to be seen. Contractors should protect their bond capacity as a valuable resource and be sure they have chosen a company that is committed to the business.

Dennis J. Perler, President

Liberty Mutual Surety
Like the contractors we support, sureties are subject to economic cycles that periodically separate stronger from weaker companies. In the last year alone, five sureties indicated they would exit surety as a product. Despite this lost capacity, it is important for contractors to recognize that many insurance companies still strongly support surety and that the better companies will invest the necessary capital and in the people, technology and claims handling capabilities. Stakeholder and credit rating agency pressure to achieve target returns on capital will continue to weed out under-performing sureties with poorer credit quality portfolios. By aligning with a responsible underwriting surety, a contractor is better positioned to have stable and consistent surety capacity critical to long-term success.

Edward J. Heine, Executive Vice President
Payne Financial Group
and President, National Assn. of Surety Bond Producers
There appears to be a consensus of opinion within the surety industry about one thing—the surety industry has to generate profitable results, as a whole, in order to be able to provide the capacity and responsiveness that our customers require. The departure of several surety companies and reinsurers from the industry and the consolidation within the primary market create a smaller foundation for our business, but the overall industry is still a strong credit facility that is well capitalized. Overall, the market appears to be stable, returning to profitability and able to serve most of our customers with the capacity they require.

Tim Mikolajewski, Vice President Contract Surety
Safeco Surety
The top reason that financially distressed contractors experience difficulties today stems from cash flow problems, which are caused by a variety of reasons: job loss, claims on a particular project where contractor hasn’t been paid and uncollectible receivables that the contractor can’t turn into cash. In terms of a company’s size, there is no question that consolidation will affect large contractors the most. There should continue to be good competition and capacity in the small and medium contractor market.

Thomas M. Kunkel, President and CEO
St. Paul Travelers Bond
Surety companies that are successful in today’s market will continue to attract capital, maintain the support of senior management and provide capacity to the market well into the future. Companies that are unsuccessful or perform in a marginal fashion will eventually elect or be forced to utilize their capital elsewhere.

Consolidation will continue to occur as marginal performers exit the business or are acquired by more successful companies with ample capital. It could also continue as a result of ongoing consolidation of the property and casualty insurance industry.

William Cheatham, President
Zurich North America Surety
Ten years ago most claims occurred from existing active accounts. Today, our experience is that approximately 50% of claims originate from accounts that are no longer customers. By identifying high-risk clients using credit-analysis tools, Zurich is able to mitigate claims. Contractors should be aware that such sophisticated credit-rating applications may become more standard in the surety industry. Overall, the three most important factors for contractors to obtain bonds are: consistent profitability, quality senior management team with a business plan that is consistently executed and adequate working capital and net worth.

With fewer insurance companies writing surety and diminished overall surety capacity, many large contractors and their surety partners are turning to co-surety as a vehicle to maintain a contractor surety relationship and develop additional capacity. So what factors have made co-surety a viable option and what are the risks of co-surety?

The broader use of co-surety today is a direct result of larger single project and aggregate work program size, industry consolidation, diminishing surety capacity and reduced reinsurance capital for surety. Generally reserved for larger contractors, co-surety is the process by which one or more sureties pool their capacity to jointly support a larger program for a contractor. By definition, co-surety is the apportionment of liability among two or more sureties. Depending on the bond language, each co-surety partner may either be jointly liable for the full exposure or separately liable for only their respective percentage share of the exposure. Similar to bank syndication of loans, co-surety allows sureties to retain contractor relationships and develop additional capacity through a process that limits exposure to the surety while spreading risk to partners.

Single project sizes and contractor backlogs have grown in recent years. The May 16, 2005, ENR Top 400 article listed 135 contractors with revenue over $300 million, of which 74 were over $500 million and 34 over $1 billion. It is not uncommon for mega construction projects such as major river bridge crossings, Interstate reconstruction or transportation initiatives to have single bond requirements of $200 million or greater. Co-surety is often the only option for contractors wishing to pursue such backlogs or larger single projects.

Consolidation has been the greatest driver of reduced capacity. Since 1997, among those companies that were part of the top 10 largest surety writers, two went insolvent, three were acquired and merged into another company and two exited the product. During this period, the market share of the top five writers grew 15.18%, resulting in contractors having access to fewer sureties willing to support larger capacity programs.

Surety capacity is directly related to surety results and over time surety results have not been favorable. With five and 10-year weighted average loss ratios of 61.02% and 46.59% respectively, most insurance companies have failed to make target returns on the capital they allocate to the surety line.

Reinsurance companies have also contributed to reduced surety capacity. As reinsurance companies follow the fortunes of the companies they reinsure, many reinsurers have lost substantial money on the surety product over the past five years. With high loss payouts and poor returns on capital, over 12 surety reinsurers have exited this product line since 2000. Among the remaining companies reinsuring surety, only about 10 companies are willing to provide the reinsurance capacity sureties require to support bonding larger contractors and projects. Many top surety writers have responded to reduced surety reinsurance capacity by moving their non-reinsured surety exposure to co-surety partners, but this transition has set the foundation for future surety reinsurance “clash” capacity problems.

A reinsurance “clash” problem is when a reinsurer greatly expands its exposure on specific contractors due to a co-surety relationship. Reinsurers develop exposure from each reinsurance program they support. If the reinsurance company supports a single surety on a large contractor, that reinsurer is liable solely for its percentage share of any potential loss within the maximum policy limits of the reinsurance program. For example, Contractor A has a $1-billion work program at the time of default and generates a loss to the surety of $400,000,000. If the surety had purchased a $100 million reinsurance policy with a $10-million-per-principal retention deductible, then that surety would retain the first $10 million in loss, recover $90 million from reinsurers and retain the remaining $300 million of loss.

But should the same reinsurance companies support three sureties with similar reinsurance programs that were co-surety on the defaulted contractor, the reinsurers would be responsible for separate $90 million recoveries by each surety, resulting in $270 million in total reinsurance losses on the co-surety program as compared to a single $90 million loss on the sole surety program.

The sureties collectively would retain the first $30 million plus the excess exposure of $100 million above reinsurance policy limits.

Should the use of co-surety continue to expand, it is possible that reinsurance companies will respond to their expanding exposure by placing limits on coverage for co-surety contractors and/or reduce support for sureties actively using co-surety as a risk mitigation vehicle. It is important that contractors and agents considering co-surety situations discuss with their sureties any potential impact reinsurance may have on the future co-surety relationship.

Another major risk to contractors is the credit default risk the original surety takes on the newer co-surety partners. In situations where co-sureties are jointly liable to an owner, each co-surety partner accepts the credit risk of having to pay the liability of a co-surety that is unable to pay a bonded claim. This credit risk is in addition to the credit risk of the contractor. Over the past five years alone as two top 10 sureties became insolvent and another was placed under state insurance department control, several sureties have assumed the joint liability exposure of the non-claim paying co-surety partner. When asked to co-surety, a number of insurance companies now require the newer co-surety partner to demonstrate certain capital and credit rating requirements. These credit security requirements limit the available pool of insurance companies deemed eligible to support co-surety.

Ultimately, co-surety is not a perfect solution for all contactors. Surety capacity is a direct function of the contractors’ qualifications, experiences, character and financial strength. For contractors having surety capacity problems due to financial condition, litigation or some other relevant business consideration, underwriting concerns may make co-surety unworkable. Co-surety can only add capacity to contractors that qualify for additional capacity.

When viewing co-surety as an option, the contractor and its surety bond producer should consider the following issues:

• Is my surety capacity limited due to underwriting reasons or due to the capacity limitations of the current surety?

• Will the new co-surety share a similar underwriting philosophy with the current surety?
• Does the new co-surety follow good claims handling practices?
• Is the new co-surety as solid as the current surety?
• Does the new co-surety have reinsurance restrictions different from the current surety?

• Is there risk in maintaining multiple surety relationships?

• What are the business costs of managing multiple reporting and underwriting processes?

• What credit security requirements does the current surety have for co-surety partners?

• Is my surety capacity shortfall a short-term or long-term concern?

Given that any strong contractor surety relationship is based on open dialogue and transparency, it is important that the contractor and its bond producer engage the current surety in a discussion regarding the merits of adding co-surety partners. Most sureties want to retain good contractors as customers and may be able to provide an alternative solution to capacity concerns. For situations where co-surety is the best option, the contractor, producer and current surety should work together to identify a new co-surety partner that is mutually acceptable to all and shares the business and underwriting philosophy of the parties.

It is the goal of the surety industry to provide bonds to any qualified and capable contractor. While those contractors who are just setting out in business and seeking their first bonds may face a unique set of challenges, the surety industry is working diligently to develop programs that help the small and emerging sector of the construction industry grow and prosper.

After successfully undergoing the thorough prequalification process and becoming bonded, the contractor can use the surety relationship and the requirements for increased bonding capacity to benchmark the growth of his or her business and to avoid the pitfalls that beset many small contractors. As more and more emerging contractors become bonded and grow their bonding capacity, they provide both public and private-sector owners with an increasingly qualified and cost-effective pool of contractors and subcontractors to bid on their work.

Members of The Surety Association of America (SAA) are committed to ensuring that bonds are available and accessible to all qualified contractors. Through its Office of Development and Diversity, SAA is actively involved in a variety of programs and activities to further the goals of access to bonding and increased bonding capacity for minority, women and other emerging contractors.

The Model Contractor Development Program

Since 2001, SAA’s Model Contractor Development Program (MCDP) has sought to fulfill the following objectives for small, minority, and women contractors:
• Provide education about surety bonds and help with bondability.
• Identify resources available for obtaining a first bond, such as the SBA Surety Bond Guarantee Program and similar state and local programs.
• Provide assistance and referrals for obtaining appropriate accounting, project management and financing expertise.
• Assist with increasing bonding capacity.
Other components of the MCDP include networking and outreach, and advocacy and policy development.

Surety Information Office (SIO)
5225 Wisconsin Avenue NW, Suite 600
Washington, DC 20015-2014
(202) 686-7463
(202) 686-3656 Fax
www.sio.org
sio@sio.org

SIO is the information source on contract surety bonds in public and private construction. SIO is supported by The Surety Association of America and the National Association of Surety Bond Producers.

The Surety Association of America (SAA)
1101 Connecticut Avenue NW, Suite 800
Washington, DC 20036
(202) 463-0600
(202) 463-0606 Fax
information@surety.org
www.surety.org

The Surety Association of America (SAA) is a District of Columbia non-profit corporation whose members are engaged in the business of suretyship. SAA member companies collectively write the majority of surety and fidelity bonds in the United States. The Surety Association is also licensed as an advisory organization in all states, as well as the District of Columbia and Puerto Rico, and is the designated statistical agent for all insurance departments, except Texas, for fidelity and surety experience. The SAA represents its members on matters of common interest before various federal, state and local government agencies.

National Association of Surety Bond Producers (NASBP)
5225 Wisconsin Avenue NW, Suite 600
Washington, DC 20015-2014
(202) 686-3700
(202) 686-3656 Fax
www.nasbp.org
info@nasbp.org

NASBP is the international organization of professional surety bond producers and brokers. NASBP represents more than 5,000 personnel who specialize in surety bonding; provide performance and payment bonds for the construction industry; and issue other types of surety bonds, such as license and permit bonds, for guaranteeing performance. NASBP's mission is to strengthen professionalism, expertise and innovation in surety and to advocate its use worldwide.