Market Capitalization

by Joshua Malone

Market capitalization is one of the go-to statistics for surety underwriters when evaluating a public corporation’s financial information. The market capitalization (commonly referred to as “market cap” for short) represents the value of the corporation’s outstanding shares and thus basically the value of the company. If an investor wanted to try and purchase a corporation […]

Happy Thanksgiving

by Joshua Malone

Offenhartz & Pedersen, LTD. would like to wish you and your family a healthy and happy Thanksgiving weekend! Thanksgiving is a time for gratitude, and we would like to thank our business partners, clients, and colleagues for a great year of service and their tireless efforts. Remember – we are available over the Thanksgiving holiday […]

Foreign Indemnity

by Joshua Malone

Foreign indemnity can produce problems for surety companies based in the United States. A foreign citizen or business may need to obtain a surety bond in the United States during the regular course of business or litigation. However, only some sureties can take foreign indemnity – and those sureties that can take foreign indemnity usually […]

Non-Disclosure Agreement (NDA)

by Joshua Malone

Many of our clients and applicants request a non-disclosure agreement (NDA) before submitting a bond application with confidential financial information. The NDA guarantees privacy between the disclosing party (the applicant) and the receiving party (the surety) by restricting how the receiving party utilizes the shared information. Typically, an NDA will limit the amount of disclosure […]

Public Official Bonds

by Joshua Malone

Public Official bonds protect the government and its citizens from the improper actions of a public official. The Federal government, as well as many local and state governments, may require these bonds from their public servants, officials, sheriffs, deputies, and other employees. Bond forms vary depending on the position, but most government authorities draft their […]

More About Qualified Domestic Trusts (QDOTs)

by Joshua Malone

In a previous blog post, I discussed the requirements and characteristics of a Qualified Domestic Trust (QDOT) bond. This post supplements the previous one by including more helpful information. Alternatives to QDOT bonds include irrevocable letters of credit or having a bank as the US trustee. A surety bond is the best option for an […]

Surety Agent Responsibility in the Underwriting Process

by Joshua Malone

Bond applicants and principals seeking surety bonds work with bond producers, such as surety agents and brokers, to satisfy their needs. Surety agents have the responsibility of underwriting surety bonds before submission to the surety for approval. When a surety agent receives a request for a bond from an applicant, the surety bond underwriting process […]

Surety Underwriting and Bankruptcy

by Joshua Malone

Surety bonds act like an extension of credit for a principal. Therefore, surety underwriters should familiarize themselves with certain credit terms of the Bankruptcy Reform Act of 1978. The act allows debtors to alleviate the impacts of their debts and other obligations they cannot afford to pay. Additionally, the act also addresses the rights of […]

Producers in Surety Markets and Their Powers of Attorney

by Joshua Malone

Agents and brokers, also known as producers, generate most of the business in the surety markets. Agents represent their surety markets while brokers represent their clients. (To review the differences between brokers and agents, click here to view a previous post on this topic.) To issue bonds on behalf of a surety, producers need to […]

Alternatives to Cash Collateral for a Surety Bond

by Joshua Malone

When a surety requires cash collateral to underwrite a bond, the principal has options other than posting money with the surety. If the principal posts collateral with the surety, the surety holds the cash in an account and sometimes pays interest on the account. However, recent interest rates have remained low and so most sureties […]