There are several issues specific to construction bonds for privately funded projects that make them substantially different from publicly funded endeavors. For example, the project owner (the obligee on the bond) becomes a crucial part of the bond qualification process in a privately funded enterprise. Knowing these issues in advance—and being prepared for them on bond submissions—can smooth the underwriting evaluation.
Issues specific to private projects include things like owner financing, the contractor’s relationship with the project owner, interest rates, and the obligee’s industrial line. The importance of the role of the surety bond producer is also heightened when working to secure private-project bonds.
Check out “A Private Matter” by Jeff DesRosier, branch manager at Old Republic Surety in Chino Hills, California, in the November edition of Construction Executive for insightful details on preparing quality bond submissions for privately owned projects.
