Author, Matt Gaynor, Director of Surety, Rancho Mesa Insurance Services, Inc.
The project our contractor client was required to bond has been completed and they are looking to get their final payment and collect their retention. But the owner or general contractor is requiring a Consent of Surety document from our contractor. What is a consent of surety and why is this document required?
The Consent of Surety document is used by the owner to check with the bond company to determine if any claims or notices have been filed with the bond company that the owner may not be aware of. The form states:
The surety hereby approves of the final payment to the contractor, and agrees that final payment to the contractor shall not relieve the surety of any of its obligations to the owner.
Essentially, the bond company agrees that they still have responsibility for the contract even after final payment has been made.
Prior to approval of this document, the bond company will typically request the final contract amount of the bonded project. They may also request that the owner complete a bond status form to determine if any problems/complaints might have occurred on the project.
Once they are satisfied that the project has completed in good standing, they will authorize the bonding agent to issue the Consent of Surety document. They will also invoice for any additional bond premium if the contract increased in size.
For more information on the requirements for a Consent of Surety document and how it pertains to your contract, please contact me at (619) 937-0165 or mgaynor@ranchomesa.com.