Surety Bond Education

What is a City of Dallas Paving Bond? This bond is required of any contractor performing paving work in the city limits, including driveway approaches, sidewalk, and curb & gutter. What protections does the City of Dallas Paving Bond offer? It offers financial security, protecting the City should a contractor not follow required specifications and ordnances and construct in a workmanlike manner, free from defects. It protects the City and holds it harmless against any persons or property that may have been injured in prosecuting the work. It supports maintenance of related construction for a period of five (5) years. […]

We’d like to take the opportunity to discuss the risks with posting cash as bid security in lieu of a bid bond. We want you to understand that you may be jeopardizing that cash.  If you are unable to meet the requirements to enter into the contract you may lose your cash. One of the contract requirements is likely posting payment and performance bonds. What Is a Bid Bond? The first step to understanding why cash may not be the best idea to post as bid security is to first understand what is a bid bond. A bid bond in […]

It’s almost election time again!  And many newly elected officials will either need to renew their public official bond or obtain new public official bond.  There are a number of different positions in local and state government that will require you to post a bond once you are elected.  The purpose of the public official bond is to provide a guarantee that you will faithfully perform all of your duties as an elected official.  The bond is typically very easy to obtain especially is the amount of the bond is $50,000 or less.  Public official bonds of $50,000 or less […]

I recently had the opportunity to write an article in the Austin Construction News August 2020 newspaper.  Check is out below or online. The Differences between Bonding and Insurance Eric Schmalz, Principal, Schmalz & Associates Surety Bonding Liberty Hill, Texas As a surety bond agent, I find that many people confuse surety bonds with insurance.  I thought it would be good to discuss the important distinctions between the two products. As a risk product business that responds to “claims”, the surety bond industry needs a pool of capital to operate and pay losses. This model lent itself to sureties becoming […]

Let’s say that you are a contractor that is interested in bidding work for TXDOT.  We can help you with the steps to bid on TXDOT Projects: Step One – Get Prequalified with TXDOT There are two different routes you can take to get prequalified to bid electronically on TXDOT projects.  The first one, Bidder’s Questionnaire, is the quickest and qualifies you for “waived” or “emergency” projects with TXDOT.  Visit the TXDOT website regarding Contractor Prequalification here.  The second method is the Confidential Questionnaire and you must submit an audited financial statement.  Please see the TXDOT website for more information. […]

We had the privilege of writing an article in the July issue of the Austin Construction News.  You may find it here. And re-posted below How does my Surety analyze my Financial Statement? Your surety company is going to evaluate creditworthiness based on three broad areas: character, capacity, and capital.  Capital represents your financial strength as a contractor and is documented by providing ongoing financial information to your underwriter. As if preparing accurate financial statements wasn’t hard enough given all it takes to run your business, it’s important we understand that these financial statements are ‘analyzed’ by your surety. The […]