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What Is A Surety Company?

Most large property and casualty insurance companies have surety departments. In addition, there are some companies for which surety bonds make up all or most of their business.

In either case, in order for a company to write a surety bond in the United States, it must be licensed by the insurance department of one or more states. While there are some exceptions, generally a surety company is required to be licensed by the state in which it is doing business or by the state where the obligation guaranteed by the bond is being performed.

State Insurance Departments

When accepting a surety or fidelity bond, it is important to know who the provider is and whether the company does indeed exist. The first point to know is that a surety bond and a fidelity bond or policy is a form of insurance. Therefore, the provider of the surety bond or fidelity bond or policy usually must be an insurance company that is licensed by the state insurance department. Check out the website of the insurance department of the state where the company is domiciled or where the risk is located to determine if the provider is licensed.

Other sources to verify the identity of the company are A.M. Best, S&P Global Ratings, Moody’s Investor Services and the Treasury List.

U.S. Treasury Department

The United States Treasury Department maintains a list of surety companies that it has certified to write surety bonds required by the U.S. Government. This list is published annually and then updated throughout the year. The most current list of Treasury authorized companies is always available through the Internet at The Treasury Department requires companies that desire to be included on its list to file financial and other information. This data is analyzed by the Treasury Department which develops a dollar Underwriting Limitation for the company. Each company listing includes the Underwriting Limitation. However, it is important to recognize that a surety may provide a single bond with a dollar limit that exceeds the limit appearing in the Treasury List. When the Underwriting Limitation is exceeded, the surety must be protected in accordance with the following rule which appears as note (b) in Treasury Circular 570:

(b) The Underwriting Limitations published herein are on a per bond basis. Treasury requirements do not limit the penal sum (face amount) of bonds which surety companies may provide. However, when the penal sum exceeds a company's Underwriting Limitation, the excess must be protected by co-insurance, reinsurance, or other methods in accordance with 31 CFR Section 223.10, Section 223.11. Treasury refers to a bond of this type as an Excess Risk. When Excess Risks on bonds in favor of the United States are protected by reinsurance, such reinsurance is to be effected by use of a Federal reinsurance form to be filed with the bond or within 45 days thereafter. In protecting such excess risks, the underwriting limitation in force on the day in which the bond was provided will govern absolutely. For further assistance, contact the Surety Bond Branch at (202) 874-6850.

A.M. Best Company

A.M. Best Company is a rating service that analyzes and rates insurance companies’ ability to meet their policy and contract obligations (Financial Strength Rating). Best gives each company an alphabetic rating (form A+ to D) and a financial size category. Property-Casualty Basic rating information is available at Best’s website: (registration required).

S&P Global Ratings

Standard & Poor’s is a rating service that provides credit ratings on government, corporate, financial sector and structured finance entities and securities. S&P establishes “Special Purpose” ratings for insurance companies. S&P rates an insurance organization's ability to pay its policies and contracts. The Insurer Financial Strength Ratings are expressed on a scale of 'AAA' to 'C'. Insurance company rating information about particular insurance companies may be obtained at (registration required).

Moody’s Investor Services

Moody’s Investor Services is a ratings service that provides credit ratings, research and risk analysis on companies worldwide. Its Insurance Financial Strength Rating examines an insurance company's financial ability to meet its obligations to its policyholders. It features ratings from Aaa to C. An Insurance Financial Strength rating about a particular insurance company may be obtained at (registration required).


SFAA Membership List

Finally, most insurance companies that provide surety and fidelity bonds are members of SFAA. You can verify that the company on your bond or policy is an actual company by referencing the SFAA Membership list.

SFAA Obligee's Guide

Now that you have confirmed the existence of the company, SFAA’s Obligee’s Guide can help you verify that the bond or policy is authentic. This guide is designed to serve obligees who may want to verify the authenticity of surety bonds that they are being asked to accept. The most reliable way to authenticate a surety bond is to contact the issuing surety company directly. However, it might be difficult to ascertain the correct address, telephone number or person to contact at the surety. This guide contains a list of surety companies that have volunteered to be included. The listings provide information as to how the sureties can be contacted for the purposes of authenticating a bond. Since participation in this program is voluntary, not every surety company is listed.

When To Inquire

If you need to verify that the bond has been authorized by the insurance company, contact the insurance company immediately after the bond is presented to ensure sufficient time for a response. When checking, it is important to recognize that it may take a few days for the surety to respond. Surety bonds frequently are executed by agents or in field offices of the company. In many cases, it takes a few days before a newly executed bond is entered into the data processing network or is reported to the supervising office. However, if an inquiry is not answered within a day or so, a follow up might be suggested.

Cross Referencing

Several of the surety companies listed in this guide are members of a group of companies which have common ownership. If all inquiries for companies in the group are to go to one particular contact, the listing in the guide will be in the name of the group with the subsidiary companies included in the listing.

Information Needed

When checking to see if the insurance company authorized the bond, the obligee should provide the following information, at a minimum:

  1. Bond number (if any).
  2. Name and address of principle (including all of the names of the parties if the principal is a joint venture).
  3. Name and address of obligee.
  4. Amount of Performance Bond.
  5. Amount of Payment Bond.
  6. Date bond executed.
  7. Name of person signing bond for the surety.
  8. Brief description of project.
  9. Contract price.
  10. Directions as to whom the confirmation should be sent.

The best way to supply this information is to enclose a scanned copy of the bond with your inquiry. If you do not have a copy, a suggested form for supplying this information is included with this guide. Consider using this form when checking with the insurance company. Click here for the form.

Note: The companies listed in this Guide have ranked their preferred method of contacting them. Please contact the company using the method that is ranked number 1 by that company. The second preferred method is shown as number 2, etc.

Check Name

The name of the surety company appearing on the surety bond should be identical to the name of the surety company appearing in the guide. If there is any discrepancy, that fact should be called to the attention of the surety company when making an inquiry.

Note: This Guide should not be relied on as an indication as to the solvency or financial strength of any of the surety companies listed. Users that are interested in determining the solvency or financial strength of the company should consult other resources such as state insurance departments, A.M. Best Company, Moody’s, S&P or insurance agents and brokers.

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