The surety industry has reacted about as we expected coming out of 2010. All contractors should expect to be asked for more information, whether its job details for current requests, updates on specific jobs in progress, or other financial updates. We are happy to be here to facilitate those communications!

On the subject of communication -- both good news and issues that may be challenging you--should all be stepped up to maximum levels! Now is the time to build on the relationship that we help to support for you by having discussions early and often. 

Most construction companies’ backlogs have shrunk this past year, and for those that have maintained reasonable working capital, cash and equity in their companies, bonding capacity should be readily available, as usual, for the right jobs.

Mid to large, well financed construction companies continue to have the support of the surety industry in the standard market.

Small to medium sized companies will be a bit more challenged by the sureties needing to better understand matters such as their cash flow capabilities, support of overhead, and profitability of new work.

We expect the majority of the claims that the sureties will see in 2011 will be related to payment bond claims. Thus, assurances of being able to cash flow your jobs (via existing capital, access to bank lines, etc.) will be critical for everyone.

The construction industry failure rate is well above the US all-industry average of 20.1%, some sources say by as much as another 15%. For startups of course, that failure rate is even higher. We know there are a number of contributing factors to the struggles many are facing in this economy, but proactive management allows companies to fare much better than reactive management in all situations.

We welcome and appreciate being considered one of your valued business partners to help you navigate through this next year.