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The Three C's to Bonding Your Company

Updated: Oct 13, 2020

Whether you're looking to establish your bond line or want to expand your current single an aggregate program following the 3 c's of bonding for contractors can largely impact the support you receive from a surety company.


As a contractor, the underwriting process can seem confusing and daunting but following the formula below can be useful. As mentioned throughout our site bonding is very subjective in nature and working with one of our bond only agents can make all the difference.


What are the 3 C's?


Character

What is the contractor's (principal) standing reputation in the market? This includes the contractor's personal history, the firm's professional history, any previous legal disputes, and banking relationships. 


Capital

Does the contractor's (principal) have financial stability? A surety company carefully scrutinizes the financial strength of the principal by looking at their tangible net worth, Working capital, debt load, credit score, nonconstruction investments, and contingent liabilities.


Capacity

Does the contractor's (principal) have the necessary skills, knowledge, manpower, and ability to complete the project? For this, the surety analyzes the previously completed projects of the contractor.

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