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CONTRACT BONDS REQUIRE DETAILED AND ACCURATE UNDERWRITING INFORMATION. THEIR HANDLING CANNOT BE SIMPLIFIED. REQUIRED INFORMATION FOR UNDERWRITING

  1. C.P.A. prepared financial statements for each of the last three years. These statements must, at a minimum, be a Compilation prepared according to Generally Accepted Accounting Principles (G.A.A.P. method) with no disclaimers from the C.P.A. If certified audits were not prepared, the last year-end balance sheet must be supplemented with complete schedules of banks, accounts receivable and payable, notes receivable and payable, and full addresses.
  2. Current personal financial statements on each owner.
  3. Fully completed Contractor's Questionnaire SB-202.
  4. Fully completed Uncompleted Contracts SB-201.
  5. A bank reference letter from contractor's principal bank confirming account balances; line-of-credit; high credit; credit history; and banking history.
  6. References: principal suppliers; past sub-contractors; architects; owners, or general contractors.

Indemnity Agreement

Personal indemnity of owners and spouses is required on all contract accounts. Since the Indemnity agreement is a legal document, the bond department will prepare it for signatures. You must furnish exact legal names of the firm to be bonded, owners and spouses. All signatures on the Indemnity Agreement must be witnessed and notarized.

Other Information Required Contract Submission SB-214

  1. A description of the contract (if private work or a sub-contract, a copy of the contract is required);
  2. Amount of the contract and bond required;
  3. A list of the other bids;
  4. Bond form, if a special bond is required;
  5. Terms of the contracts: (a) how payments will be made; (b) time for completion; penalty for delays; (c) maintenance provisions.

Supply Bonds Supply application SB-203

Since the obligation guaranteed under a supply bond is normally much less hazardous, the latest fiscal year end statement will normally suffice. Personal indemnity of owners and spouses are usually not required. Contracts for supply bonds should not include terms for advance payment to the supplier, guarantees of efficiency or wearing quality.