Performance Bonds Keep Big Projects Moving Forward

Written by JoAnn Smith on March 13th, 2014. Posted in Bond Applications, Bond Types, Contract Bonds, Michigan, Performance Bonds, Surety Bond Blog

     performance bonds
Performance bonds ensure work at the Panama Canal
As the country continues to lurch towards recovery, we are beginning to see more signs that construction, especially when it comes to the bigger projects, may be a part of that economic recovery. The announcement of the posting of performance bonds for two major construction projects point to the growing strength of the country in the construction sector. When we build, especially when we build major projects such as the Panama Canal and the Williamsett Bridge in Massachusetts, you can be assured that the economic growth of the country can’t be far behind.

Performance Bonds Puts Panama Canal Back on Track

The redesigning of the Panama Canal is a project that has been fraught with work stoppages, miscalculations and more since it began. However, the recent halt of work by the construction consortium has for two months held the entire project hostage. With a total cost of $5.2 billion, this is probably one of the biggest construction projects for this century. The good news is that the consortium will be allowed to access a $400 million performance bond in order to get the project up and running and hopefully back on track. With a two month stoppage the project is behind schedule and looking to make up for lost time once the money is placed in an escrow account. This account will be used to pay for supplies and sub-contractors, and hopefully allow the third set of locks to be completed by mid-December, a new target date.

Bridge Will Link Two Cities

In Michigan, if you want to go from Chicopee to Holyoke it may be a long trip for the next while. That is because the bridge that connected these two Michigan towns was closed in August of 2011 because of structural problems. Plans were in place to replace the bridge, and work continued on the new bridge until September 2013 when the $21 million state-run construction project was halted because the main contractor went bankrupt. This brought some serious problems as companies that depended on the bridge being completed on time were in danger of going out of business themselves. The good news is that the Department of Transportation has come to an agreement with the company holding the performance bond on the project. This company has worked with the DOT to name seven contractors who will bid for the completion project and get to work as soon as the weather allows. That will bring a sigh of relief to many businesses on either side of the river.

Performance Bonds Save Projects

As anyone can see, both of these projects would have been impossible to complete without the performance bonds they had in place before the job even began. While everyone in the construction industry is familiar with performance bonds and their importance, they are a big part of many industries outside of construction as well. Don’t let your business get left out in the cold when it comes to getting the projects you need to succeed. Come by our website or talk to one of BuySurety’s knowledgeable customer service staff and find out just how fast and easy it is for your company to be bonded for that next project. At BuySurety we have been providing performance bonds and a wide assortment of other types of surety bonds to companies large and small for decades. Get your performance bonds with BuySurety today and be ready for that next project.

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Do You Know Your Professions License Bond Requirements?

Written by JoAnn Smith on February 11th, 2014. Posted in Bond Types, Commercial Bonds, Florida, Kentucky, Latest News, Legislation, License and Permit Bonds, Michigan, Surety Bond Blog, Wisconsin

     license bond requirement      
Know your license bond requirement for your industry.
Whether you are a tradesman, a salesman or a sub-contractor in the building industry, understanding the license bond requirements for your industry can be a crucial part of any job. Almost any kind of business that involves providing a service or handling money probably also requires a surety bond of some kind. Usually this will take the form of a surety bond that is part of the licensing process for the business or trade. But the laws regarding exactly what that license bond requirement will cover and if it is even necessary can change. Keeping up with the shifting legal requirements for a license bond in your business can be difficult. While by no means an exhaustive list, here are some changes that have gone through legislation recently that will affect the license bond requirements in several industries and states.

Florida Title Insurance Agents

In the past, agents have been required to post either a license and permit surety bond or some other type of security to cover any losses incurred if an agent should violate their contract. This bond or surety of at least $35,000 was posted by the agent, not the agency. But a law was passed in 2012 that required the agency to also post a bond for this type of situation to benefit the appointed insurer. Now Florida House Bill 321 and Florida Senate Bill 570 will change this. It will eliminate the individual agent requirement, so that only the agency will be required to carry a license bond of at least $35,000 to cover any violations of the contracts regarding title insurance.

Kentucky Electrical Inspectors

As the law now stands, all electrical inspectors in Kentucky must post a $5,000 surety bond as part of their license. However, with the passage of Kentucky House Bill 38 introduced to legislature in January of 2014, certain Kentucky electrical inspectors would become exempt from this requirement. The exemptions to the need for a surety bond would include employees of the following:
  • City
  • County
  • Urban-county
  • Charter County
  • Unified local government
  • Consolidated local government
  • Any combination of governing entities
This exemption is only for work that has been authorized by the Department of Housing, Buildings and Construction for the administration and enforcement of its regulations. It should be noted that contractors, when hired by these organizations, will continue to be required to produce the license surety bond. This change for employees acting in this capacity will be effective upon the passage of HB38.

Wisconsin Mortgage Professionals

Currently in Wisconsin, individual mortgage professionals must have a license bond that does not exceed a value of $50,000 as a part of their licensing requirements. It is mandatory in order to make supervised loans and to act as a mortgage loan originator. But with the passage of Wisconsin House Bill 678 each individual branch location of a mortgage company will also have its own $50,000 license bond requirements in addition to the license surety bond for individuals.

Michigan Alarm System Contractors

If you work in the state of Michigan as a contractor that installs alarm systems, then you probably already know that this state requires all alarm system contractors to post a license bond in the amount of $25,000 as part of your licensing requirement. Currently that license bond requirement includes taking out this bond “in the name of the people of the State.” This will be changed with the passage of Michigan Senate Bill 619 to reflect that the surety bond is payable to the Department of Licensing and Regulatory Affairs for the benefit of the people of the state. The amount of the bond requirement will not change.

Knowing Your License Bond Requirement Needs

While most of us like to think we know all the requirements for licensing in our chosen profession, it can be hard to stay on top of all the legislative changes. Surety bond amounts can change or not even be required at all, which may mean you are spending more money than you need to in order to meet regulations. Worst yet, you could be facing charges and fines if you don’t have a license surety bond when you should. Know what you need and when you need it by contacting our knowledgeable and helpful customer service at BuySurety today. Find out what changes in legislature have made your license more expensive or even more complicated. We have been helping out businesses large and small find out what kind of surety bond requirements their business needs to fulfill since 1998 and we can help you. Don’t take chances with your legal standing, find out what type of surety bond you need and make sure it is current by contacting BuySurety today.

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Michigan, Ohio and West Virginia Auto Dealer Bonds

Written by JoAnn Smith on November 22nd, 2013. Posted in Legislation, License and Permit Bonds, Michigan, Motor Vehicle Bonds, Ohio, Surety Bond Blog, West Virginia

     auto dealer bonds
auto dealer bonds – do you have yours?
Auto dealer bonds for West Virginia as well as Ohio and Michigan are a big part of the legislative updates that we have seen across the country as these states have gone through economic change. Cities grow, dealerships flourish and each state needs to find a way to ensure that the dealerships conduct business in an ethical way. If you are considering opening your own vehicle dealership in West Virginia, Ohio or Michigan there are some regulations including surety bonds that you will need to fulfill. Here are the basics that you will need to be aware of when getting licensed to sell vehicles in Ohio, West Virginia and Michigan.

West Virginia Auto Dealer Bonds

The Mountain State is well named, for driving through it is like riding a beautiful roller coaster. If you are considering getting your license for a vehicle dealership in West Virginia, you will be happy to know that the requirements are the same for both used and new vehicles of all types. You will simply need to post a Motor Vehicle Dealer Bond for $25,000 as part of the licensing procedure.

Ohio Auto Dealer Bond Requirements

The Buckeye State has plenty of opportunities for anyone considering opening a car dealership in Ohio. If you want to do so, you will need to post two separate surety bonds for each dealership:

Car Dealership Requirements in Michigan

You have to assume that Michigan residents are stubborn, why else would they have decided to be called The Wolverine State? But these hardy people who are known for their pragmatism are smart enough to keep their regulations to a simple requirement. In Michigan you are required to post a $10,000 Motor Vehicle Bond for the dealership regardless of whether it sells new or used vehicles. It certainly keeps things tidy and easy to understand.

Getting Bonded the Easy Way

So now that you know what is required, are you ready to get bonded? Why not drop in to our handy surety bonds site BuySurety and find out just how fast and easy it is? We can help you with qualifying for a motor vehicle bond in any state and regardless of your credit rating. Come and talk to us today, and get that auto dealer bond you need now.

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Michigan Wind Farm to Maintain Performance Bond

Written by JoAnn Smith on July 18th, 2013. Posted in Michigan, Performance Bonds, Surety Bond Blog

     michigan wind farm, performance bonds
Michigan wind farms required to have performance bonds.
July 18, 2013 – When Exelon came before Michigan’s Huron County Board of Commissioners they had a very specific change in mind regarding their agreement with the board on the decommissioning fund for their Harvest II Wind Farm. They were hoping to change the details of their contractual agreement regarding the performance bonds they had posted. The question remained, would they be able to argue successfully that a letter of credit with an A Rated bank would be seen as an acceptable substitute. The bottom line was – no. The Board of Commissioners felt there were a number of good reasons for not allowing this change.

Financial Scrutiny is Key

The decommissioning fund is a critical part of the overall plan that the county approved for the wind farm run by Exelon. Because there is a specific lifespan for the technology, something needs to be set in place at the beginning of the project to ensure that the tax-holders are not left holding the bill when it is time to remove a non-working windmill. That is the purpose of the decommission fund in the form of a $1 million performance bond. It would ensure from the start that the company had the funds set aside to take care of decommissioning the windmills when they reached the end of their expected life. Regardless of whether the company remains solvent throughout the lifetime of the wind farm, that performance bond will still be there to take care of this when the time comes. The surety bond company, in fact, guarantees it. But a letter of credit would put the holder of it in line with other creditors should Exelon run into financial trouble somewhere down the line. This, the Huron County Board of Commissioners decided, was not an acceptable financial risk to take on behalf of the taxpayers.

The Security of Surety Bonds

The fact that the commissioners felt more comfortable with a surety performance bond is really not that surprising. Surety bonds are used in a wide variety of industries as a financial guarantee. They are often viewed as less risky than other forms of financial insurance because there is a third party involved who guarantees the surety bond. In this particular instance even the Huron County Building and Zoning Office Director was not in favor of making the change. He felt strongly that the fact that the surety bond company had been willing to back up the surety bond was a sign that they felt Exelon was in good financial shape. Having a signed Letter of Credit from a bank that the company already had a relationship with was not going to give him the same reassurance as the performance bond.

Performance Bonds Guarantee

If you are looking at a project or undertaking that requires financial guarantees, you might want to consider using a surety bond. Regardless of whether you need a Bid Bond for that upcoming bid on a project, a Payment Bond to guarantee payment to your subcontractors or a Performance Bond tied to your contractual obligations, BuySurety can provide it. We’ve been providing solid surety bonds to a variety of industries since 1998.  Why not contact us today and find out just how easy it is to work with BuySurety for all your surety bond needs.

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Contract and Commercial Surety Bond Legislature Update in 2012 for Michigan

Written by JoAnn Smith on December 17th, 2012. Posted in Court Bonds, Michigan, Performance Bonds, Surety Bond Blog

     
Michigan State Seal
There were three Senate bills and one House bill that were passed during the past year’s sessions that will affect the posting of surety bonds. A Senate bill was passed that changes the circumstances under which a conservator of an estate can be excused from posting a surety bond. Another Senate bill was passed that established a court procedure for a person to follow for revocation of a child’s paternity and includes the posting of a surety bond as collateral against court costs. The current law regarding the requirement for grain dealers to post a surety bond against their facilities for open storage or warehouse receipts was repealed. Finally, a House bill was passed that revised the definition of a surety.  

Senate Bill No. 461: Court Bond—Conservators

The Michigan Senate passed into law through Senate Bill 461 a change in requirements for a conservator of an estate. The law as it had stood allowed the court to require the conservator to post a bond. Under the new law, if the value of the estate’s cash (and property that could be easily converted into cash) exceeded $15,000 and was under the conservator’s control, there could be circumstances under which a bond posting could be waived. These circumstances were:
  • If the cash in the estate is in a restricted account in a financial institution.
  • If none of the property is easy to convert into cash.
  • If the conservator has been given trust power as defined by the State’s Banking Code.
  • If posting a surety bond by the conservator will create a financial hardship for the conservator as determined by the courts.
  • If the court should state a reason why they do not think a bond is needed.
Any of these reasons would allow a conservator of an estate to be able to forgo the posting of a Conservator Surety Bond. In addition, as in the previous law, a conservator can also use a pledge of securities or the mortgage of land as their security in place of the surety bond if it is required. This senate bill was enacted on June 19, 2012 and went into law on October 1, 2012. If you wish to read the bill in its entirety you can see the complete Senate Bill 461 at the link provided to the legislative site.  

Senate Bill No. 557: Court Bond

A bill was recently passed in the Michigan Senate that creates the procedure for a person to file to revoke their acknowledgement of parentage of a child and also determine the child’s paternity. There will be a requirement of the person filing for revocation to post a surety bond. The surety bond will ensure the costs of attorney fees and other costs if the person wishing to revoke parentage does not succeed. This law was enacted on June 14, 2012 and went into effect as law upon its enactment on June 14, 2012. Anyone wishing to read Michigan Senate Bill 557 in its entirety can simply follow our link to the legislative site and the entire bill.  

Senate Bill No. 887: License Bond—Grain Dealers

Grain dealers got a break this legislative session when the Michigan Senate decided to pass a bill that would repeal the bond requirements for them. Prior to the passage of Senate Bill 887, grain dealers who had facilities for open storage or storage under warehouse receipts were required to post bonds at the following capacities:
  • The first 1,000 bushels of storage capacity would require a bond be posted for $15,000.
  • Every additional 10,000 bushels of capacity or fraction of this amount required an additional $5,000 be added to the Agricultural Dealer Surety Bond.
  • Blanket bonds to cover more than one facility were accepted.
  • Blanket bonds must be equal to the cumulative sum required for the dealer surety bond based on total capacity or $400,000, whichever was less.
With the passage of Senate Bill 887 these requirements will no longer be in effect. The bill was enacted on May 31, 2012 and became a law in effect repealing these bond requirements on the day it was enacted. To see the full text of Senate Bill 887 be sure to follow our link that is provided to the legislative site.  

House Bill No. 5082: Uniform Commercial Code

The Michigan State House Legislature passed House Bill 5082 that will revise the definition of a surety within any act that refers to the posting of a surety bond in the Uniform Commercial Code. The new definition will add the phrase “any secondary obligator” to the prior definition of a “guarantor.” This change of the definition of a surety will then make the definition comply with the current American Law Institute’s Restatement of the Law of Surety. The house bill was enacted on April 17, 2012 and became effective law on the same day. To read the complete text of the House Bill 5082, be sure to follow our link to the site for legislative bill access.

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