Archive for May, 2013

Performance Surety Bonds and Missouri Public Theft

Written by JoAnn Smith on May 30th, 2013. Posted in Missouri, Performance Bonds, Surety Bond Blog

     performance surety bonds, missouri
The Seal of the State of Missouri
May 29, 2013 – Did you know that performance surety bonds can help to protect a public office such as a County Circuit Court office against theft? That fact was borne out this week when the Cass County Commissioner Office in Missouri decided to file a performance bond claim. It turns out that a Circuit Clerk had stolen close to $7,000 last year. The theft occurred when the clerk took cash intended for deposit, which was one of the clerk’s duties with the court. Although the existence of surety bonds cannot stop someone from stealing, it can ensure that the monies stolen are recovered if the original thief does not have the ability to do so. In this case the defendant was instructed to pay restitution for the funds stolen from the County Circuit Court, but was unable to come up with the money. The filing against the performance bond, that most public institutions are required by law to have, will allow the courts to collect the funds. The defendant has agreed to pay restitution over time. In the meantime, the claim from the performance bond will allow the courts to balance their accounts. Like many other public institutions, in the state of Missouri they are required to have performance bonds for all public employees to ensure their proper behavior. Generally speaking, a public official surety bond is what is used for any public institution. In this case, a performance bond to ensure the performance of all employees of the Missouri Circuit Courts was used as an umbrella surety bond. As a result of this finding, a thorough examination of the courts financial records are being done to find out if any other irregularities might result in additional missing funds. So far there has been no discovery of any manipulation of the records and the only time that money was taken was during the three deposits between July and October of 2012. Not sure what kind of surety bond your business might want to have? Surety bonds fit all kinds of needs and every kind of industry. Contact us today to find out how easy it is to get all your surety bond needs taken care of with a simple phone call.

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Performance Surety Bonds Cover Unpaid Subcontractors in Vermont

Written by JoAnn Smith on May 23rd, 2013. Posted in Performance Bonds, Surety Bond Blog, Vermont

     performance bonds, surety bonds
state office building in Battleboro, Vermont
The fallout from the bankruptcy filing of Baybutt Construction Corp. had left many subcontractors on a variety of jobs without payment for work completed. As we reported earlier, the company had been in financial trouble for the last year and had finally been pulled from several projects over the last six months as subcontractors began to walk off the jobs due to non-payment. Those projects, which included work on the Vermont State Office Building, a fire station in Keene and a library renovation project in Rockingham were all in danger of struggling to be completed but now seem to be back on track.

Work Resumes on Most Projects

As of May 14th, all but five of the 35 subcontractors working on the Keene Fire Station had been paid through the insurance company that handled the surety bond for the project. The project manager for the Battleboro project on the state office building stated that work was back on track after negotiations had been successfully completed with subcontractors claiming nonpayment from Baybutt. Workers were either up to date on payments or had reassurances they would be paid as work resumed on April 1st. The project is expected to be completed by July.

Performance Bonds Missing in Rockingham

The library project in Rockingham is a bit more complicated as the $210,000 paid to the contractor for bonds by the library board was never used for payment on performance bonds. As a result, when subcontractors walked off the job for non-payment there were no surety bonds in place to turn to for completion. At this point there is a court case pending and the library board has stated they will use the monies set aside to pay Baybutt to reimburse the subcontractors. They will also scale back the plans for the library reconstruction project so that it can be completed within the new financial strictures. These surety bond payments, and lack of them, only emphasize how important it is in every project to ensure that performance bonds are in place from the beginning. All of the projects that had surety bonds as part of the agreement, and were in fact posted, could then fall back on them to take care of these unpaid subcontractors and ensure the project could be completed. Looking for a performance bond or other kind of surety bond? If you have questions about your need for a performance bond for an upcoming project, be sure to come by the BuySurety site for help with all your surety bond needs. We are always available to answer any questions and help you find the surety bond that suites your individual situation.

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Texas & Nevada Consider HOA Surety Bond Bills

Written by JoAnn Smith on May 22nd, 2013. Posted in Commercial Bonds, Nevada, Texas

     HOA Cheating
Will Surety Bonds Help Fight HOA Fraud?
Legislative bills in both Texas and Nevada are looking closely at find ways to regulate and oversee Home Owner Associations (HOA) including requiring surety bonds. In Texas, House Bill 3803 would require HOAs to be more transparent in their financial duties to the neighborhoods they represent. It would also introduce government oversight, a long time goal of many homeowner activists who say they often have no recourse in disputes with HOA except to bring them to court. The legislative bill is running into opposition from HOA lobby organizations including the Texas Community Association Advocates. They claim that the bill is not only unworkable but that it also punishes the volunteers who work selflessly to help HOA by their involvement in the organizations. It should be pointed out that the TCAA is a representative of for-profit HOA in the Texas region. They are opposed to both the oversight discussed at the House Business and Industry Committee meeting as well as any motion towards the establishment of surety bond requirements for HOA and their boards.

Nevada Bill Addresses HOA Fraud

Nevada is considering a similar bill after dealing with massive fraud within the Homeowners Association industry. The recent uncovering of massive corruption schemes that resulted in millions of dollars being redirected have prompted new legislative action. The new bill would require both greater oversight and surety bonds to ensure proper behavior. Many homeowners have become activists in a bid to curb the huge profits being made by companies that run national home owners association organizations. As a result, more and more states are looking at finding ways to regulate the industry as well as using surety bonds as a way to require more ethical behavior from those within the industry who deal with the homeowner’s funds on a regular basis.

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Surety Bonds and Private Construction Projects

Written by JoAnn Smith on May 20th, 2013. Posted in Performance Bonds

     performance bonds for construction
Performance bonds secure private construction projects too
Tough economic times have resulted in more subcontractors defaulting on projects, resulting in the surety bond business seeing an increase in default claims. As a result, many private construction projects that may not have required performance bonds in the past are now making them part of the bidding requirements. Many see this change as a result of the stress created by changes in the construction industry that is still in the midst of recovery from the 2008 market crash. One of the side effects of this increased requirement for surety bonds from subcontractors on project bids is that for many smaller companies or businesses just getting into the industry, qualifying for a surety bond may be more difficult than ever. The increased competition for a smaller number of projects has resulted in smaller margins.These can be wiped out by just one delay in a project. The end result is that more subcontractors have been walking off the job, sometimes even without the company going bankrupt.

Surety Bonds Requirements Increase

They simply could not afford to stay when delays made the job unprofitable for them. This has often resulted in projects going over budget as replacements become more expensive. As a result, contractors have now begun to require performance bonds as part of the bid process with subcontractors to ensure completion on time and on budget. But with these new requirements many surety bond companies are increasing their requirements to cover the increased number of defaults. This can lead to new businesses that do not have deep financial reserves unable to even qualify. The recent appearance of questionable surety bonds in the marketplace along with many small contractors having to bypass possibly profitable projects have been the result.

Surety Bonds for Risky Business

While it is true that for many mid-sized contractors the need for surety bonds has increased while the qualifications for them have grown, not all companies are alike. Within the surety bond industry, some surety bond brokers have specialized in servicing these hard to qualify contractors. If your company is having difficulty finding a surety bond that you can afford for a private construction project, or any project, come talk to the agents at BuySurety to find out what we can do to help. We understand the industry and the needs of small contractors to qualify in these difficult times. Find out what you need to know to qualify and get the surety bonds you need to be successful.

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ERISA Administrators – Tax Season is Best Time to Adjust ERISA Surety Bond Coverage

Written by JoAnn Smith on May 18th, 2013. Posted in ERISA Bonds

     ERISA surety bonds
Are your retirement plans fully secured?
BuySurety, a leading provider for surety bonds would like to remind any administrators for company retirement plans and 401K plans that tax time is the best time to review your ERISA bond coverage and make any adjustments that may be needed. Although the April 15th deadline may have just passed, a review of the 2013 allocations for ERISA bond coverage should be reviewed at this time to plan for the next year. With the Employee Retirement Income Security Act of 1974 requiring the establishment of ERISA bonds for securing any pension, retirement or 401(k) plans, a review of the amount of surety bonds in place is not only prudent but is good protection.

Surety Bonds for Protection

These surety bonds will protect any company that has retirement accounts from actions taken by administrators that are dishonest including:
  • Larceny
  • Theft
  • Embezzlement
  • Forgery
  • Misappropriation
  • Wrongful Abstraction
  • Wrongful Conversion
  • Willful Misapplication
Because plan assets change from year to year it is important to review the assets of the fund and make appropriate changes on a yearly basis at the minimum. Also, because asset security requirements are different for Qualifying Asset Funds and Non-Qualifying Asset Funds, each type will need to be assessed separately. Qualifying Asset Funds are required to be protected through ERISA Surety Bonds that are equal to a minimum of 10% of the value of the funds. Non-Qualifying Asset Funds must be protected with surety bonds valued at 100% of the value. BuySurety has a number of ways we can help company retirement plans meet their ERISA requirements. Talk to one of our agents today to find out if multiple-year ERISA surety bonds that adjust for annual rates of inflation would be the right fit for your company’s retirement packages.

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