Foreign companies doing business in the U.S. sometimes need a surety bond for different projects or contracts that they are bidding on. In most countries, they do not use surety bonds. Some countries are beginning to require surety bonds, which are fairly unique to the U.S. If you are a company that is beginning to work in the U.S. and will need a surety bond, obtaining a surety bond in the U.S. can be daunting.
Many companies, especially those abroad, have lines of credit with banks. Various obligations not in the U.S. are often secured by letters of credit, whereas in the U.S., this is not common practice. So finding surety agencies that have relationships with surety companies that can take indemnity of a foreign company is very beneficial to those companies.
Sometimes, the client will call one or two brokers, and those brokers say, ‘Oh, I cannot help because you are a foreign entity.’ My office has been very successful in getting foreign entities bonded for various types of obligations. We have relationships with companies that can perfect foreign indemnities and have the understanding, background, and knowledge to do so.
Working with a knowledgeable surety agent can have a material impact on your ability to obtain a bond. Many large insurance agencies work with the 7 largest surety companies. These top 7 companies have been around the longest and are not looking to underwrite anything that falls out of the normal course of business. My office deals with over a dozen A-rated surety companies that are financially sound and are able to think outside of the box, so to speak. I have found that working with a variety of surety companies with different risk appetites allows us to write bonds that would have otherwise been declined.
If you represent a foreign company trying to get a surety bond in the U.S., please call me. Let us have a conversation and start working on the matter. Being turned down by somebody else does not mean you are not bondable.
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