Already a requisite for most types of public contracts, surety bonds are becoming a more common inclusion in private developers’ insurance requirements for contractors, particularly within the context of Public-Private Partnership (P3) construction contracts.
The amount of surety required and the constellation of risks the bonding agreement must encompass will depend largely on the specific structure of the P3 arrangement (of which there are more than a dozen variations), the public entity overseeing the project and the nature of the project itself.
Though capacity for P3 surety bonds is available through several markets, very few underwriters have emerged with surety products designed specifically to address the unique nature of P3 arrangements.
Additionally, the rising rate of delays and defaults among subcontractors and smaller GCs in the last two years has led a majority of sureties to impose much stricter underwriting standards to construction firms seeking bonds for new projects.
To mitigate the financial impact of securing surety bonding, contractors should carefully evaluate any public/private project’s feasibility and long-term sustainability, as well as the financial health of its private and public partners prior to bidding on a P3 contract. Additionally, contractors should avail themselves of every opportunity to steer both the project’s planning and the P3 contract’s terms and conditions.
Join us for this free Oct. 30 webinar, sponsored by Zurich Insurance, in which experts in the construction risk and surety bonding fields will explore the many complexities of public/private partnerships from a risk management perspective, as well as potential solutions available to construction risk managers through the surety bonding market.
Speakers for the webinar are Drew Brach, managing director and U.S. surety practice leader for Marsh Inc., Larry Bartelemucci, chair of the Real Estate and Construction Practice Group, at Anderson Kill & Olick, and Lynn Schubert, president of the Surety and Fidelity Association of America.
The panelists will be available to field questions from our live online audience.
This webinar will be moderated by Business Insurance Associate Editor Matthew Dunning.