Posted by: jmwilsonmga | August 6, 2013

Bonding for Your Commercial Contractors : Contractors Questionnaire

In my last blog in February, I discussed financial statements and their importance for contractors wanting to obtain bid and or performance bonding.  In this blog, I want to briefly discuss the importance of the Contractors Questionnaire.

contractors questionnaire 1While business financial statements are generally thought to be the most important piece of information to consider an account for bid or performance bonding, they are not the only item required.  In fact, if an underwriter had very good financials for a contractor, but nothing else, he could not authorize a bond line for that contractor.  The underwriter has to know as much information and history on the contractor as possible, and some of that information is very specific.

The contractor’s questionnaire will ask for the complete name and address for the business and the year the business was started.  Their construction specialty as well as their geographic area of location will also be asked.  Questions on largest jobs completed to date, largest work on hand programs in the past, and any subcontracting operations will be asked.  There are also the standard bankruptcy and litigation inquiries.

Other information generally asked for;

  • list of subsidiaries or affiliates
  • list of officers / owners with position / title and percentage owned
  • information in regards to the preparation of the contractor’s financial statement
  • information in regards to the contractors relationship with their bank, including the current status of any line of credit that might be set up
  • information in regards to their previous surety relationship

There may be some additional information asked for in questionnaires for different surety companies, but the aforementioned items are the most important and in all of the questionnaires.  These surety questionnaires should be completed in as much detail as possible.  This will help save time in the underwriting process, and with bonding, particularly bid bonds, time is of the utmost importance.

In future contractors bonding blogs, I will discuss bank lines of credit, work on hand schedules, and credit history.  They’re all parts of the puzzle that are needed to properly consider a contractor for bid and performance bonding.

As always, should you have questions or need some help with bonding for a contractor, please don’t hesitate to contact me.

Steve-Kuykendall---Bonds-blue-copyAbout The Author : Steve Kuykendall, Surety Manager

Steve has been a proud member of the J.M. Wilson Team since 2000 and currently serves as the Surety Manager. He has been in the surety business for 36 years as an underwriter, an agent, and as a broker.  He really enjoys the challenge of trying to find a way to write a bond and loves helping agents and their account obtain a bond that so many times they have not been able to obtain anywhere else!  He is married with four grown children, as well as nine grandchildren!  He also enjoys golfing, boating, and fishing.

Disclaimer :  This article is for informational purposes only.  There is no legal advice being suggested or proffered.  The author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information.  This article is the opinion of the author and is not supported or endorsed by J.M. Wilson.  It should not be relied upon and may contain inaccuracies or content may have changed over time, contact your underwriter for the most current and accurate information.  Any comments or responses are the opinions of their authors.  Content on this site is believed to be covered under Fair Use. Legal

Copyright 2013 J.M. Wilson Corporation

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