SuretyScience - Blog #PoliticsSuretyScience - Blog #Politicshttps://www.suretyscience.ai/blogs/tag/politicsWed, 08 Apr 2026 18:04:23 -0700http://zoho.com/sites/<![CDATA[Surety Industry Advances Critical Federal Policy]]>https://www.suretyscience.ai/blogs/post/surety-industry-advances-critical-federal-policy

Washington, D.C., United States, March 03, 2026 (GLOBE NEWSWIRE) -- Largest Legislative Fly-In Brings Industry Message to Congress

The Surety & Fidelity Association of America (SFAA) and the National Association of Surety Bond Producers (NASBP) hosted their most successful Federal Legislative Fly-in to date, bringing a record number of surety professionals from across the country to Capitol Hill to engage lawmakers on the value of surety bonding as a proven safeguard for protecting taxpayer dollars and mitigating risk on federally supported projects.

During meetings with Members of Congress and congressional staff, participants highlighted the proven value of construction surety bonds and focused on building support for the bipartisan Water Infrastructure Subcontractor and Taxpayer Protection Act (S. 570 / H.R. 1285). The legislation would strengthen the Water Infrastructure Finance and Innovation Act (WIFIA) program by requiring appropriate bonding protections for all projects, including public-private partnerships (P3s).

The bipartisan measure was introduced by U.S. Senators Mark Kelly (D-AZ) and Kevin Cramer (R-ND), along with U.S. Representatives Mike Bost (R-IL) and Chris Pappas (D-NH).

Surety professionals held over 155 meetings with policymakers and staff to emphasize the significant cost savings and risk mitigation that surety bonding delivers to taxpayers nationwide. Drawing on data from the Ernst & Young (EY) study, The Economic Benefits of Surety Bonds, industry leaders reinforced that surety bonds safeguard taxpayer dollars; ensure project completion; protect subcontractors, suppliers, and workers; and support long-term economic growth.

“Engagement between SFAA and NASBP members and federal policymakers is central to our advocacy mission, ensuring Congress recognizes the essential role surety bonds play in strengthening and protecting public infrastructure projects,” said Ryan Work, President and CEO of SFAA. “In partnership with NASBP, these discussions on Capitol Hill advance the industry’s priorities and provide lawmakers with clear, actionable insight into the issues impacting the industry.”

“The needs of our nation’s critical infrastructure are clear, and surety bonds provide the guarantee that these projects will be completed while safeguarding taxpayer investments,” said Mark McCallum, CEO of NASBP. “The value of surety is a compelling story—one that every new Congress should understand as it works to advance the country’s infrastructure and economic growth. I appreciate the surety professionals who took the time to share that message directly with their Members of Congress.”

NASBP and SFAA also hosted a briefing featuring insights from U.S. House Transportation and Infrastructure Committee Chairman Sam Graves (R-MO), who outlined Congress’s infrastructure priorities and underscored the indispensable role of surety bonding in delivering projects on time and on budget while protecting taxpayers. In addition, Alex Gleason, SFAA Head of Government Affairs, held a discussion with Nick Christensen, Republican Staff Director of the House Transportation and Infrastructure Committee. The day’s program concluded with a political outlook from Amy Walter, Publisher and Editor-in-Chief of The Cook Political Report, who was introduced by Larry LeClair, NASBP Director of Government Relations.

SFAA and NASBP will continue to engage with Congress, the Administration, and federal agencies to advance policy priorities that strengthen the surety and fidelity industry.

To read the EY report and get additional information on the value of surety, visit www.surety.org/suretyprotects.

The Surety & Fidelity Association of America (SFAA) represents all segments of the surety and fidelity industry. With more than 425 member companies writing 98 percent of surety and fidelity bonds in the U.S., the association promotes the value of surety and fidelity bonding and its vital protections through advocacy, outreach, promotion, and education. SFAA is licensed as a rating or advisory organization in all states, and state insurance departments have designated it as a statistical agent for the reporting of fidelity and surety experience.  www.surety.org

Founded in 1942, the National Association of Surety Bond Producers (NASBP) is the association of and resource for firms employing surety bond producers and allied professionals. NASBP members specialize in providing surety bonds for construction contracts and other purposes to companies and individuals needing the assurance which surety bonds offer. www.nasbp.org

]]>Tue, 03 Mar 2026 20:43:00 -0500<![CDATA[Growth in Demand for Manufacturing Drives Record Surety Bond Guarantees in FY25]]>https://www.suretyscience.ai/blogs/post/growth-in-demand-for-manufacturing-drives-record-surety-bond-guarantees-in-fy25

SBA Backs Historic $10.6 Billion in Contract Value

WASHINGTON — Today, the U.S. Small Business Administration (SBA) announced that its Surety Bond Guarantee (SBG) Program delivered record results in fiscal year (FY) 2025 with $10.6 billion in guarantees, marking the strongest year in the program’s history. In FY25, the program supported more than 2,200 small businesses – especially those within the construction, contracting, manufacturing, and fabricating sectors.

“In addition to surpassing the $100 billion mark in 2025 for small business lending and SBIC investment, the Trump SBA guaranteed a record $10.6 billion through our Surety Bond Guarantee Program to support small manufacturers, contractors, and other job creators across our industrial base,” said SBA Administrator Kelly Loeffler. “With historic backing from the SBA, this Administration is empowering small businesses as they meet new demands for hiring, growth, and investment made possible by the America First economic agenda.”

Through its Surety Bond Guarantee Program, the SBA provides a guarantee on surety bonds for certain surety companies, which allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties. Surety bonds help small businesses compete for and win public and private contracts by providing the customer with a guarantee that the work will be completed.

The results underscore the agency’s broad success in expanding access to capital, strengthening domestic manufacturing, and helping small businesses reduce their regulatory burdens. Last year, the agency approved record lending through its 7(a) and 504 loan programs, totaling $45 billion to more than 85,000 small businesses. Combined with capital deployed through the SBIC and SBIR programs, the agency supported over $100 billion in capital in FY25.

Surety Bond Guarantee Program Record Performance Highlights:
  • $10.6 billion in total contract value supported through guaranteed bid and final bonds, surpassing last year’s record by 15%.
  • More than 2,200 small businesses assisted, the highest number in the past decade.
  • $3.4 billion in contracts generated for small businesses, exceeding the previous annual record by 19%.
  • 75 bonds guaranteed for manufacturers and fabricators, a 36% increase over FY2024.

]]>Fri, 20 Feb 2026 01:06:08 -0500<![CDATA[President Trump’s tariffs fueled U.S. Customs bond market boom. Now billions hang on Supreme Court ruling]]>https://www.suretyscience.ai/blogs/post/president-trump-s-tariffs-fueled-u.s.-customs-bond-market-boom.-now-billions-hang-on-supreme-court-r

If the Supreme Court rules President Donald Trump’s International Emergency Economic Powers Act (IEEPA) tariffs are illegal, U.S. companies would not only be in line to receive tariff refunds, but also billions of dollars paid to insurance companies in customs bonds and collateral. Customs bonds, also known as surety bonds, provide coverage to importers guaranteeing the payment of duties and taxes levied on imported goods. The value of these bonds and related collateral has soared alongside the steepening tariffs levied by the Trump administration.

Importers buy these bond through specialized insurance companies known as surety companies. These bonds, issued around 30 days before their imports arrive in the United States, are required by U.S. Customs and Border Protection for all trade entering the country to ensure that Customs collects the requisite tariffs in the event that an importer does not pay its obligation. The bonds are held for 314 days by Customs in accounts that bear no interest. During this time, duties that were paid can be reviewed and receive final government sign-off.

U.S. importers pay a premium to insurers for their bonds, with the premium typically calculated as 1% of the bond limit, and these bonds have soared as tariff rates rose. The price of customs bonds covers 10% of the duties and taxes paid over a rolling 12-month period, so if tariffs and taxes go up, the customs bond goes up as well.

“With some tariffs increasing from 10%-25% or more for certain products, importers are facing customs bond amounts that now range from the minimum bond amount by regulation of $50,000 to $450 million,” said Vincent Moy, international surety leader for Marsh Risk. “We have seen bond increases of upwards of 200%. In one unusual case, a large auto manufacturing client saw its custom bond amount increase by 550%,” he said.

Insurers, in turn, are making more money from premium collection, says Meyer Shields, managing director in property and casualty insurance at KBW. Customs bonds can be purchased either for a single entry bond for one shipment or a continuous bond, where a shipper imports multiple shipments a year and covers the entire year.

In some cases, according to Moy, the change in tariff rates and increase in the price of the imports has resulted in companies receiving “insufficient notices” from Customs.

Jennifer Diaz, board-certified international attorney at Diaz Trade Law, said the number of bond insufficiency notices issued has quadrupled since 2017 and has accelerated recently due to the volatile tariff environment. In 2019, insufficiency notices soared because of tariffs related to Section 301 of the Trade Act of 1974.

For the Jan.-July period of 2025, the most recent for which U.S. Customs data is available, bond insufficiencies were close to $1.5 billion. Total bond insufficiencies for 2024 were $545.7 million. According to a November estimate from global shipping company Western Overseas Corporation, the nationwide number of customs bond insufficiencies issued by U.S. Customs has increased by nearly 526 percent.
Trade attorneys tell CNBC importers should be requesting reminders of when their bond is about to expire because the money in the existing bond may be running low.

“You don’t want imports sitting at the ports because your bond doesn’t cover the tariffs,” Diaz said. “Importers should speak with their surety and customs broker and ask to be reminded when the bond is about 75% saturated. It usually takes about 10 days for a new bond to be issued, so you don’t want your imports to be sitting at the port being charged detention and demurrage fees.”

According to Diaz, 50% of insufficiency notices are for bonds under $100,000.



Collateral as tariff payment guarantee

These increases in bond limits have forced some companies to issue collateral in addition to the bonds to guarantee the company can pay the tariff bill. “If companies do not increase their collateral, the goods will be stopped at the port,” Moy said.

The collateral is held by the insurance company that issues the bond for the 314-day period dictated by U.S. Customs for the bond guarantee process.

“The duties are just so much higher than they’ve ever been,” said John Sheppard, executive vice president of insurance brokerage at Shea & Company, specializing in the placement, administration, and claims handling of U.S. Customs bonds. “This underwriting process is a complex process involving credit evaluation and the quality of the importer’s ability to respond to customs would be. If the surety determines the principal will unlikely be able to meet their obligation under the bond, that is when things like collateral or additional guarantees are brought into play.”

Surety experts tell CNBC that while there is sufficient insurance supply to meet this demand, it is causing a flurry of activity in the market to complete transactions. “The uncertain tariff environment is impacting importers of capital goods, luxury brands, and everyday necessity products,” Moy said. “These companies work with surety bond brokers to find surety insurers with the financial strength to support multi-million-dollar bonding limits.” 

Surety insurers are developing new risk modeling tools to determine the terms and pricing for the larger and less predictable liabilities. As a result, many importers are paying significantly higher premiums to maintain their customs bonds, which now come with stricter credit terms. “Well-capitalized importers will qualify for larger customs bonds, while those with weaker balance sheets may be required to post additional security/collateral with the surety providers, which can put a strain on their liquidity positions,” Moy said. 

But trade experts also tell CNBC that the situation for importers has been complicated by the fact that it is difficult to forecast import duties over a rolling 12-month period when the tariff rates are changing so quickly. Insufficiencies, sudden collateral demands, and a scramble to adjust bond agreements have become the norm rather than the exception for many.

“Increased customs bond requests offset the slowdown in renewable energy, with both trends driven by government policy,” RLI chief operating officer Jen Klobnak said on the insurer’s fourth quarter conference call earlier this month.

But if the Supreme Court rules the IEEPA tariffs are illegal, that’s bad news for insurers but good for the companies seeking refunds.

“If tariffs are refunded, the bond amounts associated with those imports will be allowed to reduce to levels sufficient to cover the duties, taxes, and fees,” Moy said. “Companies will need to petition the insurance company that issued the bond for a reduction of the bond and collateral.”

“If tariffs are ruled illegal and there are refunds, it would be a revenue headwind,” Shields said. “It is a fair amount of work for insurance companies to audit accounts, but the reconciliation process is not new for them. However, the magnitude of trade has grown,” he said. But Shields added that in the bigger picture, “the upside to have freer trade and less uncertainty wins the day. Clarity is more positive than negative,” he said, even if insurers have to return bond funds.

Another layer of uncertainty is the potential for any new tariffs the Trump administration enacts to replace the existing IEEPA tariffs if the Supreme Court rules those tariffs illegal. The Trump administration has promised it has other legal means to enact tariffs ready to go which would substantially replace the IEEPA tariffs and have the same policy effect.

David Craven, counsel to Diaz Trade, said the threat of new replacement tariffs coupled with the existing liability facing surety companies suggests that any refunds would not be immediate. “The fact that liability has gone up, and Customs is now asking the sureties for collateral ... operations are at risk, and sureties understandably don’t want to be caught holding the bag,” Craven said.

The Supreme Court did not issue the highly anticipated ruling on Trump’s IEEPA tariffs before a month-long recess began earlier this month, meaning the earliest possible date for an opinion is now February 20.

Moy warned that in the event the Court does rule against Trump, companies should expect some lag time in receiving these funds due to insurance paperwork requirements. The insurance company will need to verify and audit the paper trail before it releases any collateral.

“Some sureties have collateral return review procedures that can take 30 to 60 days for them to go back to underwriting to review. That’s typical,” Diaz said. She added many small and medium-sized businesses should now be asking their surety for a return, so the process to get this reviewed starts. “If you are hoping that the collateral will just be returned in due course, the squeaky wheel may make this happen a little bit faster,” she said.

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