Surety Bond Education

Surety Bond Education

Public Official Bond

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 […]
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September 2020 Austin Construction News Article

I had the opportunity to contribute an article to the September 2020 edition of the Austin Construction News publication.  You can find the article here. Common Risk Factors in Surety Underwriting Eric Schmalz, Principal, Schmalz & Associates Surety Bonding When I began my surety underwriting career in 2002 as a trainee, one of the foundational books I was given to read was “Construction Contractors’ Survival Guide” by Dr. Thomas C. Schleifer. The book was written for construction contractors to learn from, but the parallels to surety underwriting make it a tremendous asset in learning about elements of contractor failure that […]
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August 2020 Austin Construction News Article

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 […]
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What Are The Steps To Bid Electronically on TXDOT Projects?

Let’s say that you are a contractor that is interested in bidding work for TXDOT.  We will provide some basic steps below to help you understand what you need to do to get started. 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 […]
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July Austin Construction News Article

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 […]
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What Do You Look For In A Surety Bond Agent?

In my past as a construction surety bond underwriter and manager I have worked with some great bond agents.  What are some differentiating traits?  See the list below.  Remember, the goal of any bond agent should be to become a business consultant, someone you call needing solutions, referrals, or even just to vent.  Your agent can only take on this role if you allow them to.  It’s about more than getting the next bond, use their knowledge to your advantage! Work with a Specialist The surety industry is a highly specialized and nuanced niche business. Choose a agent who is […]
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