We’re frequently asked the question by both agents and contractors…” what information is needed to establish a surety relationship?” This question is usually then followed up by…” How much surety credit do I qualify for?” The response to both questions can be complicated and the so-called laundry list of documentation can be extensive. Bonding a contractor can be looked at in a similar manner that one looks at in establishing a credit-based relationship with any financial institution. Aside from a surety’s well-established underwriting guidelines, underwriting is both an analytical process as well as an acquired skill for determining risk characteristics associated to each contract surety account submission. More specifically, sureties are looking to make an acceptable evaluation of what are referred to as the three “C’s” which are Capital, is the contractor financially viable, Capacity, does the contractor have the experience, equipment and staffing necessary and Character, their commitment to credit obligation and project performance history. Lacking in one of these three areas may not alone be a deal breaker but will factor in the decision process.

While the surety underwriting process may seem to be pain staking it’s best to remember that the initial submission is the first indication of the contractor’s overall organization. A thorough initial submission may help to maximize the appearance of the company, speed up the underwriting process and require fewer follow up questions. Sureties have their standard contractor’s questionnaire and guidelines for underwriting documentation requirements. All the information is generally required but depending on the level of surety risk an underwriter may place a higher level of importance on certain areas of documentation. The key to this is to provide as much information to the underwriter as you can in order to establish a contractor’s skills, experience and financial wherewithal.

The below guide offers a breakdown of relevant information requested by a surety for the first bond, as well as ongoing account maintenance. The depth and quality of information may vary if it’s determined that the size and frequency of surety risk will remain small, in general a bond program under $500,000.

Emerging Contractors Program

The checklist might include the following requested information:

1. The past 3 fiscal year-end financial statements. This is important for trending profits and retained earnings from year to year.


1. CPA audit or review needed over $1,000,000 with tax returns.


2. Current interim financial statement and aging receivables and payables report. This is important if the last fiscal statement is over 6 months old to ensure that operations are profitable when applying. This information can be generated internally, with bank cash confirmations and A/R aging schedule.


3. Copies of any bank line of credit agreements and recent line of credit statement. This is important for additional source of working capital.


4. A current personal financial statement. This does not carry the weight of the company balance sheet but could tip the scales in the case of added liquidity of the owners.


5. A current statement of work in progress. This is important to determine how leveraged the balance sheet is to the cost to complete.


6. Completed contractor’s questionnaire. This is equivalent to submitting a prequalification package to a customer for whom you wish to work. It is the company resume. Make sure it includes:


1. Resumés of owners/key employees


2. Contact information on the largest jobs completed


3. The company website address for added information


4. Any positive letters of reference


5. Trade references


6. Banking and legal representation


7. Life insurance policy information of the owners


7. Certificate(s) of insurance to ensure adequate coverages are in force.

View our contractor’s guide to bonding checklist