2020 is proving to be another challenging year for contractors; COVID-19 follows the loss of confidence brought about by Brexit and the demise of Carillion in 2018. As such, sureties are more cautious when considering new bonds after paying claims following the collapse of several large travel operators as well as construction companies.
surety bonds

As a result, surety underwriters are asking a lot more questions before deciding whether to support a company’s request for a new bond requirement. We are seeing a reduction in facility levels offered by sureties and those companies that have in the past been able to rely on one or two surety providers will probably need to add to their panel as underwriters look to reduce their exposure.

Gallagher has dedicated surety specialists with exceptional knowledge of the bonding market, helping to ensure our clients have adequate capacity when bidding for contracts. We can add real value to your business by negotiating capacity on competitive terms and also provide an ongoing service with advice on bond and indemnity wordings.

The surety market is always evolving, and there have been a couple of recent new entrants (and indeed exits) and changes in appetite and underwriting personnel. It is vital to keep abreast of these changes, so utilising the services of a specialist surety broker can really help.

Our team understands company financials and how to present these to underwriters, often pre-empting the questions that the underwriters will be asking. Currently, in addition to the usual questions around profitability, order book and cash flow, underwriters are asking more questions around the individual contracts they are bonding and requesting regular updates on how 2020 is shaping up.

We can help facilitate with the questions posed by underwriters and navigate the flow of information, helping to ensure your business is presented in a positive light. Please do not hesitate to contact us to discuss your surety bond requirements.