Solutions Specialty Insurance Brokers
Specialty surety bond solutions ranging from license and permit bonds to commercial, contract and subdivision bonds, including difficult-to-place requests.
Surety bonds have been our agency’s main specialty for many years. We hold access to top “A” rated and Treasury listed surety companies, we have in-house authority to execute many bonds in our office immediately, and we write contract bond programs with aggregate limits up to $10 million.
Many bonds are processed regardless of credit. If you have been declined elsewhere, that is the work we do.
A surety bond is a three-party agreement that guarantees a business will meet a specific legal or contractual obligation. If the business fails to perform, a bond claim can be filed and the bond provides a financial remedy.
Surety bonds are required by state agencies, city and county governments, project owners and private entities before you can hold a license, bid on a project or start a development. The bond is issued in favor of the party requiring it.
Key points:
Every surety bond involves three parties.
The obligee changes with the bond type. On a license and permit bond it is usually a government agency issuing the license. On a contract bond it is the project owner or general contractor. On a subdivision bond it is the city or county granting the construction permit.
Before a bond is executed, the principal and spouse sign an indemnity agreement. This document sets out the principal’s obligations and confirms that the principal will reimburse the surety for all costs and expenses arising from a claim. Some indemnity agreements must be notarized or witnessed.
Surety indemnity is why bonds are underwritten more like credit than insurance. The surety expects to be made whole, so it assesses whether you can stand behind your own obligations.
Business owners often search for surety bond insurance, but a bond and an insurance policy work differently.
Under a surety bond, the principal must perform as promised. If a claim is filed, the surety investigates and contacts all parties. Where the claim is valid and the principal still fails to fulfill the bonded obligation, the principal must reimburse the surety for all payments and expenses resulting from the claim.
Insurance is a two-party agreement. When the insurance company pays a claim, it does not expect reimbursement from the insured.
| Commercial insurance | Surety bond | |
|---|---|---|
| Parties | Two | Three |
| Who is protected | The policyholder | The obligee |
| Loss expectation | Priced into premium | Expected to be zero |
| Recovery from you | No | Yes, under indemnity |
Request a Free Surety Bond Quote Today and we will confirm which bond form your agency or project owner requires.
Commercial surety bonds cover obligations that are not tied to a construction contract. They guarantee that a business will comply with a statute, a regulation or a licensing rule.
Often referred to as commercial bonds, these are the bonds most businesses encounter, from vehicle dealers and freight brokers to car wash operators, tire haulers and janitorial contractors.
Commercial bond requirements are set by whichever body licenses or regulates your industry. Two businesses in the same city can face different bond forms, amounts and filing procedures depending on their license category.
License and permit bonds are required before a regulatory agency will grant or renew your operating authority. They guarantee that you will follow the laws governing your trade and give the state or the public recourse if you do not.
License bonds are generally tied to a trade or professional license issued at state level. Permit bonds are more often tied to a specific activity or location, such as operating a facility or handling regulated materials.
Most owners meet these as business license bonds and business permit bonds at initial licensing, at renewal, or after a change in ownership or license status.
California license bonds make up a large share of the bonds we write, and requirements differ by license type and issuing agency. We confirm the current bond form and amount with the obligee before submission so nothing is rejected at filing.
Some industries carry bond requirements that sit outside the standard licensing categories. Business surety bonds we specialize in include:
This is not a complete list. If you do not see your bond, or you are not certain which bond you need, contact us to discuss the requirement.
Request a Free Surety Bond Quote Today and we will identify every bond your license class requires before you file.
Contract bonds guarantee a contractor’s performance and payment obligations on a specific construction project. They protect the project owner from the cost of an incomplete job or unpaid subcontractors.
Contractor surety bonds are mandatory on most public work and are increasingly requested on private projects as owners and lenders tighten risk controls.
Bond requirements are set out in the bid documents or the contract. The bonding requirements on a project determine how much capacity you need in place before you can bid at all.
Surety underwriting for contract bonds is a credit exercise built around three factors: character, meaning your track record and history of completing work; capacity, meaning the people, equipment and experience you hold relative to the job size; and capital, meaning working capital, net worth and the quality of your financial statements.
Surety bond underwriting on larger programs typically calls for CPA-prepared financials, a work in progress schedule, a bank reference and personal financial statements from the owners.
Once approved, your surety sets a single job bond limit and an aggregate bond limit. The first caps the size of any one bonded project, the second caps the total value of bonded work you can carry at one time. We write contract bond programs with aggregate limits up to $10 million, and we grow that capacity with you as your financials support it.
Bid bonds are submitted with your proposal. They guarantee that your bid is genuine and that if you win, you will enter the contract and furnish the required final bonds.
They are usually written for a percentage of the bid amount, commonly 5 to 10 percent, or for a flat sum named in the bid documents.
If you win and withdraw, the owner can claim the difference between your bid and the next acceptable one. Sureties therefore underwrite your final bond capacity at the point of issuing the bid bond.
Performance bonds guarantee that you will complete the work according to the contract terms, schedule and specifications. If you default, the surety can fund completion, tender a replacement contractor or compensate the owner.
Payment bonds guarantee that subcontractors, laborers and material suppliers are paid. Federal projects require them under the Miller Act, and most states impose similar requirements on public work through their own statutes.
The two are usually issued together at 100 percent of the contract value. Once the project reaches acceptance and the warranty period closes, the obligation is released.
Request a Free Surety Bond Quote Today and we will build a bonding program sized to the work you want to win.
Subdivision bonds are required by cities and counties when a developer agrees to build public improvements as a condition of map approval or permit issuance. They guarantee that the improvements will be completed and dedicated to the municipality.
These bonds differ from standard contract bonds in one important way. There is no owner paying the developer for the work, so the surety is underwriting the project’s financing as much as its construction.
Common triggers include tract and parcel map approvals, street and utility dedications, storm drain and sewer installation, landscaping and monumentation.
Improvement performance bonds secure the developer’s obligation to complete the specific improvements listed in the subdivision agreement, on the schedule the agency sets.
Most municipalities require a matching labor and material bond alongside the performance bond, plus a warranty or maintenance bond running for a period after acceptance.
Grading permit bonds are a related requirement, posted before earthwork begins. They guarantee that grading is completed to the approved plan and that the site is stabilized, erosion controlled and restored if work stops partway.
Because subdivision bonding is credit intensive, underwriting focuses on the developer’s balance sheet, the funding in place for the improvements and the cost estimates the agency has approved.
Request a Free Surety Bond Quote Today and we will review your subdivision agreement before you commit to a completion schedule.
Most surety companies are highly selective and will not approve a bond unless the applicant meets the underwriting criteria for that bond. Specialty surety bonds exist for the applications those standard programs decline.
We have developed the expertise to process difficult surety bond requests quickly and with the minimum amount of information. Our flexible approach and access to top “A” rated and Treasury listed surety companies allow us to meet the demands of complex surety requirements.
Our agency holds in-house authority to execute many bonds in our office immediately. We are the decision-makers on those bonds, which removes a layer of delay from applications that would otherwise sit in a carrier queue.
A surety bond company issues and backs the bond. A surety bond agency or surety bond broker like Solutions Specialty represents you and markets your file to the surety whose appetite fits your profile.
California surety bonds, Arizona surety bonds and Nevada surety bonds each follow their own filing rules, statutory forms and renewal cycles. We stay current on form revisions so your filing is accepted first time.
Many bonds are processed regardless of credit. Where an application has been denied before, the reason is usually one of four:
Surety bond cost is quoted as a percentage of the surety bond amount required by your obligee. Applicants with strong credit and clean history sit at the low end of the market range. Applicants with credit issues, recent claims or limited operating history are rated higher, and some markets ask for collateral or additional indemnity.
We work hard to obtain an approval and rarely deny a surety bond. If your credit is less than stellar, or your financial statements do not meet standard surety underwriting guidelines, we have specialty programs for you.
Request a Free Surety Bond Quote Today. Call (323) 771-0777 or submit the form and we will tell you what your bond needs and what it will cost.
A surety bond is a three-party agreement that guarantees a business will meet a legal or contractual obligation. If the business fails to perform, the surety compensates the party protected by the bond. The business then reimburses the surety under its indemnity agreement.
The obligee requires a bond, the principal applies for it, and the surety issues it after reviewing the principal’s credit and financial position. The principal pays a premium based on a percentage of the bond amount. If a valid claim is paid, the principal repays the surety in full.
No. Insurance is a two-party agreement, and the insurer does not expect reimbursement from the insured after paying a claim. A surety bond is a three-party guarantee protecting the obligee, and the principal must reimburse the surety for all payments and expenses resulting from a valid claim.
The indemnity agreement is a contract between the surety and the principal, signed before the bond is executed. It sets out the principal’s obligations and confirms that the principal will reimburse the surety for all costs and expenses in the event of a claim. Some indemnity agreements must be notarized or witnessed.
The surety is the carrier that issues the bond. The principal is the applicant or contractor required to obtain it. The obligee is the agency, project owner or municipality that requires the bond and is protected by it.
We write commercial bonds including DMV vehicle dealer, DMV registration service, California car wash, parking lot, waste tire hauler, defective title, freight broker and janitorial bonds. We also write contract bonds including bid, performance and payment bonds, and sub-division bonds including improvement performance and grading permit bonds. Programs run from small license and permit bonds to contract bonds with aggregate limits up to $10 million.
A license and permit bond is required by a government agency before it will issue or renew your license or permit. It guarantees that you will operate in compliance with the laws governing your trade. If you breach those rules and cause harm, the bond provides a financial remedy.
Commercial surety bonds guarantee obligations that are not tied to a construction contract, such as licensing, permits and regulatory compliance. They cover industries from vehicle dealers and freight brokers to car wash operators, tire haulers and janitorial contractors. The required amount and bond form are set by the regulating authority.
The most common reasons are that credit did not meet the requirement for the type and size of bond requested, the financial statements did not meet the underwriting criteria, the applicant lacked the necessary experience for that bond type, or the bond fell outside the carrier’s appetite. Most surety companies are highly selective. A specialty broker can often place the same risk through a program built for it.
Yes. Many bonds are processed regardless of credit, and we hold specialty programs for applicants whose credit or financial statements fall outside standard surety underwriting guidelines. We work hard to obtain an approval and rarely deny a surety bond.
For most license and permit bonds you need the exact bond form, the required bond amount, your business and license details, and owner information for a credit review. Contract and sub-division bonds also require financial statements, a work in progress schedule, bank references and personal financial statements from the indemnitors. We work to process difficult requests with the minimum amount of information.
Premium is a percentage of the bond amount, not the full face value. Standard commercial bonds for applicants with good credit sit at the low end of the market range, while high-risk classes, large contract bonds and credit-impaired applicants are rated higher. Call (323) 771-0777 with your bond form and amount for exact pricing.
Call a bond specialist at (323) 771-0777 or submit the form and we will tell you what your bond needs and what it will cost.
Get a Surety Bond QuoteCall (323) 771-0777
Maywood: 4445 Slauson Ave, Maywood, CA 90270 | Corona (by appointment): 4160 Temescal Canyon Rd Ste 401, Corona, CA 92883
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