Basic
These are the three C's of surety
What is:
Character
Capacity
Capital
Bonds required by local ordinances, state laws & federal government
What are license & permit bonds?
Type of bond guarantees a contractor will enter into a contract
What is a bid bond?
Types of CPA financial statements
What is compilation
reviewed
and audited?
Surety "steps in the shoes" of principal to complete contract work
What is takeover?
Tri-party agreement is where one party, surety obligates itself to a second party, the obligee, to answer for default of third party, principal.
What is a surety bond?
They agree to be responsible for debt of primary debtor if fail to meet obligations
Who is the surety?
Type of bond guarantees completion of contract
What is a performance bond?
General indemnity agreement protects?
Who is the surety?
Tender
What is surety provide obligee new contractor to complete the contract work?
Bond principal's and indemnitor's promise to pay the surety for any loss sustained from writing bond for the principal
What is a general indemnity agreement?
Party obligated to perform a specific task or adhere to certain regulations
Who is the principal?
Type of bond guarantees subcontractors & supplies will be paid
What is a payment bond?
Types of accounting methods
Cash
Accrual
Percentage of completion
Surety determines cash settlement or penal sum
What is negotiate?
Difference between surety & insurance
Insurance Surety
2 parties 3 parties
losses expected losses not expected
Pays deductible Reimbursement expected for losses
In order for a bond to properly executed this document must be attached to the bond form
What is the Power of Attorney?
Financial Statements
Work in Progress
Personal Indemnity
Bank Relationships
What is capital?
tax returns
CPA prepared
Finance
What is surety provides financing to principal so job can be completed?
Life cycle of bond
Application
Indemnity
Bond form & amount
Underwriting
Issue (renew, if necessary)
License & Permit
Judicial
Probate/Fiduciary
Public Officials
Miscellaneous Commercial Contract
What are types of commercial bonds?
Working Capital
Net Worth
Profitability
Ratio Anaylsis
WIP
What are industry metrics for financial analysis?
Extent to which agents are authorized to issue & execute bonds without prior surety approval
Decline
What is surety denies claim or waives right to complete the contract work?