Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.
I recently had the opportunity to work with a new client who is a landscape professional. He wanted to bid on a maintenance project for a local municipality and wasn’t sure if he would qualify for the required performance bond.
After a brief discussion of how bonding differs from insurance, we decided to collect some basic information to determine if he would “pre-qualify” for the bond before putting together a full submission. The bond company ran the personal credit of the owner and determined that they would support single bonded projects up to $500,000.
After a careful review of the project specifications, the client decided not to bid on the project. We mutually decided he should provide additional information to the bond company in the event he wanted to bid on a larger project that was going to be released in the following month. The information requested by the bond company included:
a.) Completed contractor questionnaire
b.) Two year-end financial statements or tax returns for the company
c.) A personal financial statement for the owner(s)
Based on the additional information provided, we were able to negotiate a $1,000,000 single project / $3,000,000 aggregate bonding program for this particular landscape professional. The client executed the bond company general indemnity agreement and was off and running to bid the larger projects.
Make sure you work with a professional surety agent who can help assist with the bonding process if you are considering bidding on public works projects. It can save you a lot of time and effort.
Contact Rancho Mesa at (619) 937-0165 if you have any bonding questions.