Growth and Expansion: What to Expect From Your Surety

Denise Gillin News

By William Chapman for Construction Executive

The decision of whether to grow and expand is one that contractors face daily. Some of the many reasons why a contractor may decide to grow or expand include requests from key customers, access to additional capital, the addition of key personnel, market conditions, strategy or necessity. Growth and expansion can take many forms: larger contract price, more complicated or expansive scope, changes to the business plan, mergers and acquisitions, hiring of a new division or working in an unfamiliar geographic area.

With growth and expansion comes risk. Not properly identifying, managing and mitigating these risks can lead to troubles ranging from slight to severe, including financial losses, project defaults or even contractor failure.

A good surety partner will seek to understand. While big jumps in job size or other plans to expand can be red flags, a surety will always try its best to underwrite the contractor’s ability to understand and manage the inherent risks of growth and expansion.

In these scenarios, your surety will likely have additional questions and information needs centered on project specifics and the three Cs of surety: character, capacity and capital.

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