Bond Request Form    Questionnaire    Personal Financial Statement
(Right click on the appropriate link above, save the document to your hard drive, fill it out, and e-mail to info@ttgtx.com)

The surety underwriting process is one of the most rigorous processes that an owner of any business, especially construction, will be subjected to at any time.   Why, you may ask?  Because when a surety underwrites your business, they are looking at the entire picture to ensure proper capital, internal resources, personal financial resources, relevant personnel experience and other factors are in place to support the bonds the surety may be asked to write for your business.

The surety business is essentially a “hybrid” between insurance and credit, although surety bonds are not insurance policies.   Insurance policies can be cancelled for many reasons including non-payment, while bonds cannot be cancelled.  Yes, it is true that surety bonds are issued by insurance companies, but the surety and insurance divisions of these companies are separate operating divisions and typically do not interact with one another.

Sureties look to develop long term relationships with their construction clients and underwrite to a zero loss ratio, which is the reason the underwriting process for obtaining surety credit is time consuming, detailed and rigorous.   For example, insurance underwriters expect losses from accidents, fires, etc.  Surety underwriters, again, underwrite to a zero loss ratio, meaning they do not ever expect to pay out money for claims, defaults, etc.

As a means to make the underwriting process much easier, we have listed the following underwriting information requirements, which will save you time in working with your professional surety agent in putting together a complete submission.   A complete submission to the surety company means they are able to respond in an expeditious manner to your bond needs.

Financial Information/Work-in-Progress:

1. Complete copies of the last three years of fiscal year-end financial statements, as prepared by a construction-oriented CPA firm.   Note: If you do not have a construction-oriented CPA or would like more information on obtaining the services of a qualified CPA, please call our office and we will be happy to provide references of surety approved CPA firms.
2. Current in-house financial statement (balance sheet, income statement, A/R aging) and work-in-progress schedule.
3. Personal financial statements from any stockholder having 10% or more in ownership.
4. Complete copies of financial statements from any affiliated operations are also required if the aforementioned financial statements are not consolidated by the CPA.

Contractor Questionnaire:  Please see the link on our website for a copy.   If you have recently completed a questionnaire from another source (insurance agency or surety company form), this is acceptable as long as the information is not more than a year old.   AIA Qualification Statements or TxDOT Pre-Qualification Statements are acceptable alternatives for a contractor’s questionnaire.

Banking Information:  Depending on your company’s bond needs, the surety company may or may not require a formal revolving line of credit.   If a line of credit is currently in place, we will need documentation including the line amount, maturity date and details on the bank line covenants.    Some surety companies may require copies of personal or corporate banking statements as a part of the underwriting process, as well.  Note:  If you do not have a formal line of credit in place, but would like information on how to obtain a formal bank line, please call our office and we will be happy to provide a list of bankers that specialize in establishing line(s) of credit for contractors.

Resumes or Bios:   Information outlining current and previous project experience, industry experience and any relevant formal education.   This is necessary for all owners of the company and it is also recommended that you include this information for field management/supervision.

Reference Letters:   If your company or its key personnel have received reference letters related to previously completed work, please include copies.   This is vital underwriting information as the surety will conduct reference calls to owners, suppliers and/or subcontractors as a part of the underwriting process.   Anyone you may list on the contractor’s questionnaire will, more than likely, be contacted by the surety company and it is recommended to advise these references in advance to expect a phone call from a surety company representative.

Insurance Certificate:  A copy of a current insurance certificate (Accord Form) is required showing current policies, limits and expiration date(s).

Credit:   Most surety companies have access to the D&B (Dun & Bradstreet) credit reporting information and typically pull a current D&B as a part of the underwriting process.   Some sureties may also require personal credit reports as a part of the underwriting process.

Continuity Program:   If your company has a buy/sell, completion agreements or some other information to ensure the perpetuation of the business, this is also essential underwriting information to include.     Please note this is not always an immediate requirement even though most surety companies will want some form of continuity program developed in a reasonable amount of time.

We hope you find this information helpful in making the underwriting process more “user friendly” and easier to navigate.   In the event you need more information regarding surety programs, underwriting requirements or any other surety-related question, please contact Jodi Neal at 713.785.6785 x3 or via e-mail at  jodi@ttgtx.com.