Unlike a standard insurance policy, a surety evaluates whether the contractor is financially capable of completing the obligation being guaranteed.
Depending on the bond and project size, the surety may review:
- Personal credit
- Business credit
- Financial statements
- Bank balances
- Working capital
- Net worth
- Prior construction experience
- Project history
- Largest completed job
- Current work in progress
- Contractor experience
- Claims history
- Existing bond obligations
Larger performance and payment bonds generally require more underwriting than a small license bond.