June 12, 2017 by Canadian Underwriter
Toronto-based Approved Surety & Casualty Inc. announced on Monday that is has launched a capital disbursement program for brokers to enhance contractor bonding limit.
“Approved Capital is a capital disbursement program for brokers that will allow their contractor clients to qualify for higher bonding limits, while providing our surety markets with extra security,” explained Don Miller, Approved Surety’s president and CEO, in a press release. “After a one year incubation of the program, we are ready for the mainstream.”
According to the company, Approved Capital provides financial management on construction projects by employing sophisticated job costing systems to monitor all cash flow behaviour. Additional services include professional bookkeeping and legal support; business is accepted from construction companies across Canada and the United States.
The capital disbursement program provides insurance brokers, contractors and surety partners assistance to secure suretyship and alternative options that include: development of successful surety applications, bookkeeping, accounting assistance and financial assurance management plans that provide the surety with the “comfort and confidence to bond based on our professional project accounting controls with monthly reports and monitored performance at every stage in the project.” Access to construction lawyers are also provided.
Approved Surety said in the release that small construction companies account for the overwhelming majority of construction companies and are “often as technically capable as contractors with more financial resources.” However, they are unable to qualify for bonds due to their inability to meet the minimum net worth and working capital requirements.
“Our program offers so much value, we utilize sophisticated cost accounting methods, and build a relationship with the contractor with the goal of growing their business and bonding facility,” Miller said in the release. “We are pleased to work with Echelon Surety as one of our founding partners.”
Designed in consultation with surety professionals, the program is intended to be the “most effective” in the surety industry, Approved Surety reported. “We are currently launching the program with Echelon Surety as our initial clients, but expect strong interest from a number of sureties in large part due to the recognition that traditional underwriting methods alone are not sufficient to deliver superior service and results,” the release said.
Approved Surety assists with securing surety facilities for small and emerging contractors and services those industries that are outside the “traditional surety box,” the company noted. With competitive rates and terms and conditions that are often less onerous than the traditional surety marketplace, it provides brokers with standard lines products where there is a known shortage of capacity and assistance with hard-to-place lines. Approved Surety accepts business from licensed insurance brokers (on behalf of their construction clients) across Canada and the U.S.