Providing expert advice is key to industry's growth, execs say | Official: Oil and gas driller meets Texas city's bond requirements | Conn. court ruling raises concerns about firms' claims exposure
November 15, 2012
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Industry News
Providing expert advice is key to industry's growth, execs say
Pricing is soft in the surety market, but professionals have learned from the crash that shook the industry early last decade and are working with contractors that are on sound financial footing, experts say. The construction market seems to be recovering after the financial crisis, but it is also changing. "On the municipal side, jobs are larger, so there are fewer contractors that can apply for them," NASBP President Carl Dohn said. One key to future success for producers and sureties is building and capitalizing on consultative relationships with contractors. "This is definitely a market where sureties and brokers that have strong expertise in business and can be an adviser to their customer can be extremely valuable," according to one surety executive. National Underwriter Property & Casualty (11/12)
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Official: Oil and gas driller meets Texas city's bond requirements
A Houston energy company wants to drill for oil in Port Arthur, Texas, and has met the requirements of the city's ordinance for doing so, according to the city's senior planner. The ordinance requires the company to post a $25,000 surety bond and to obtain a $450,000 bond to protect against damage to a nearby street, the senior planner said, adding that he wasn't aware of any opposition to the driller's request for a permit. Port Arthur News (Texas) (11/11)
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Conn. court ruling raises concerns about firms' claims exposure
The Connecticut Supreme Court has determined that the state can sue contractors "any time, any number of years" after a project's completion, an attorney notes. The case stems from a construction project at the University of Connecticut, and the ruling could have significant implications for contractors, the attorney writes. "Companies performing public work must be conscious of the extended -- indeed, unlimited in time -- exposure they have to claims and lawsuits by the government," he writes. (free registration) (11/7)
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Surety payout covers claims against former Miss. circuit clerk
An investigation into the former circuit clerk of Lincoln County, Miss., has been resolved with a $61,000 payout from a surety. The clerk pleaded guilty in January to avoid facing a trial on embezzlement charges. The clerk's bond also covered investigative costs incurred by the state auditor's office. The Daily Leader (Brookhaven, Miss.) (11/9)
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Policy Update
Expert: Small contractors must take note of federal agenda themes
Budget cuts could make 2013 a tough year to contract with the government, but companies can weather the storm by looking for projects that match their previous experience, according to a consultant. Contractors should be on the lookout for projects in areas including sustainability and cybersecurity, the consultant notes. "Budget uncertainties mean federal buyers want best value and maximum flexibility on short notice with minimum commitment," she writes. American City Business Journals/Washington, D.C. (11/7)
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NASBP Nov. 27 Virtual Seminar: Contract Bond Forms -- What To Look For And What Might Be Missing
Subtle differences in performance and payment bonds can make a tremendous impact in the principal's and surety's liability on a bond. Do you know what these vital differences are? Join us at 2 p.m. Eastern time Nov. 27 for the Virtual Seminar titled Contract Bond Forms -- What To Look For And What Might Be Missing, when Steve Nelson, Esq., executive vice president and general counsel of SureTec Insurance, will describe what triggers the surety's obligations on a bond, what the bond covers and when suits on the bond are barred. Also, Nelson, who is also president of SureTec Information Systems, will explain when the surety has an option to perform and when its options are limited, who may make a claim on the payment bond and how long they have to do so, and what a surety can do to shorten limitations or narrow the scope of coverage. Nelson oversees SureTec's claims, funds disbursement and subcontractor prequalification operations, mediates construction industry disputes for others, and teaches construction and procurement law and dispute resolution at the University of Texas School of Engineering. Registration for each Virtual Seminar is $69 per site. Visit to register now.
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Discount of $100 on AICPA National Construction Industry Conference registration fee
NASBP members, affiliates and associates can receive a discount of $100 on their registration for the American Institute of Certified Public Accountants' (AICPA) National Construction Industry Conference, to be held Dec. 6 and 7 at the Venetian in Las Vegas. NASBP associate Emilio F. Alvarez, CPA, president of E.F. Alvarez, and NASBP affiliate David Pesce, senior vice president of Berkley Surety Group, will participate in two presentations. First, on a panel, they will share their experiences about today's surety industry and surety credit capacity, and that afternoon they will explain what construction contractors' financial statements should include and how these items should be presented, during a session titled "A Surety Perspective on Contractor Financial Statements." In addition, NASBP associate Julian Xavier, CPA, partner at Gallina, will co-present a session on utilizing two industry resources for an independent auditor's report, consolidated balance sheets, statements of income and notes to consolidated financial statements. The NASBP membership discount applies to AICPA member and nonmember registrations. To take advantage of this $100 discount on the conference registration fee, insert the promotional code "SCX" on the online registration form where prompted or in the promo code box on the printed registration form. Register now or call 888-777-7077 for more information. By using the code, NASBP members will receive $100 off the early bird AICPA member registration fee of $920 and the early bird non-AICPA member registration fee of $1,220 (which expires Nov. 24) and $100 off the AICPA member registration fee of $995 and the non-AICPA member registration fee of $1,295. View the AICPA conference brochure.
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Market Trends
Survey: Insurers look to boost premiums, profits as market changes
Property/casualty insurers are becoming more selective in underwriting risks as they look to raise premiums and improve profitability, giving signs that the market is starting to harden, according to a survey. "While we did not include agent and broker responses in the survey findings, given the response rate was statistically smaller, the sentiment this group provided was in line with their counterparts at commercial-lines carriers -- that they were experiencing a hardening market even before Hurricane Sandy," one expert said. PropertyCasualty360 (11/6)
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Editor's Note
SmartBrief will not publish Thursday
In observance of Thanksgiving in the U.S., SmartBrief will not be published Thursday, Nov. 22.
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Nothing in life is to be feared. It is only to be understood.
Marie Curie,
Polish-French physicist and chemist
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Founded in 1942, NASBP is the association of and resource for surety bond producers and allied professionals. NASBP producers specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance offered by surety bonds.
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