Contract or Commercial Surety Bonds: The Legal Landscape and Current Trends- Philadelphia Insurance Companies

Surety Bonds: Understanding the Trends, Choosing the Right Company

When it comes to surety bonds, it's important to choose a company that knows the market and can support your needs. Philadelphia Insurance Companies (PHLY) is one of the largest and strongest companies in the U.S. surety marketplace, offering financially-sound bonding options for qualified construction contractors and commercial surety accounts. Below you will learn about the current landscape for the U.S. surety market, along with everything you need to know to find the right partner in surety.

Contract or Commercial Surety Bonds: The Legal Landscape and Current Trends

In the United States, there are federal, state, and local statutes that require contract or commercial surety bonds on construction projects or commercial surety obligations. At the federal level, the Miller Act (40 U.S.C. 3131-3134) requires surety bonds for all publicly funded construction projects that are contracted for more than $100,000. Most states have their own laws that require surety bonds for much smaller construction projects - some as small as $5,000. Virtually every construction project today that is funded with public money requires surety bonds. When shopping for a surety bond, many government agencies require companies to have an AM Best rating of A- or better and be qualified by the U.S. Treasury Department.

In the United States, the construction market is seeing significant opportunities for growth. There is a consistent demand for improvements to aging infrastructure. According to the American Society of Civil Engineers, the U.S. would need around $4.5 trillion by 2025 to upgrade the state of its roads, bridges, airports, dams, and more. This is driving U.S. surety growth. Tax reform is also driving growth, as experts expect an increase in economic activity driven largely by a repatriation of funds by large corporations, a significant portion of which are continually investing in U.S. infrastructure projects.

Changing demographics in the U.S. are also driving growth trends in surety. Recent and rapid residential development is transitioning to public works projects. Schools and other municipalities will likely need to launch construction projects of various sizes to respond to demographic shifts in their communities. All trends considered, the surety market is expected to grow to over $13M by 2027.

Finding the Right Partner for Surety Bonds

Because there are few differentiators between bonds offered by surety bond companies, the type of company you choose to work with is very important. Here are three key qualities to look for when choosing a company you can trust for surety bonding:

  • Reputation
  • Size
  • Service

The right company to partner with will have positive marks in each of these categories.


Reputation is crucial for surety bonds. A company with a strong background in surety bonding can guide you through the bonding process, helping you and your clients navigate a complicated legal and financial landscape. Surety bond companies with good reputations bring much-needed industry knowledge to the process.

A strong financial reputation is important as well, as this is needed to handle any claims that may arise. You can look for an insurance provider's AM Best rating to help determine financial strength. A strong rating indicates a stable financial foundation and excellent positioning in the marketplace. PHLY has an A++ rating from the AM Best Company - the highest rating they offer.


Larger companies have more resources with which to provide a streamlined experience and maintain strong agency relationships. PHLY is among the largest carriers in surety bonding, consistently ranked amongst the top 20 in the nation with a treasury listing in excess of $300 million. Our Surety Division works with local, regional, and national agents and brokers who represent contractors seeking performance bonds for commercial surety account business, as well as small transactional surety bond needs.

We seek individual producers, as well as agency or brokerage firms, that have strong moral character and a good business reputation. While PHLY does work with national brokers, our relationships are handled on a local or regional basis.

PHLY has also invested heavily in outstanding loss control and claims operations - both of which are vital for carriers in the surety space. Our experienced risk management and claims professionals have years of experience dedicated to handling surety bond issues. While you shouldn't judge a company on size alone, it can be a proxy for other indicators you're considering when choosing a surety partner.


Last, service is important to consider because it can save you valuable time. A customer-focused company will offer quick and easy services and access to surety experts to answer your questions when needed. This can save you a lot of time in the long run when trying to place or obtain surety bonds. PHLY has a dedicated support team with a 96% overall customer satisfaction rating and a reputation for excellence and expertise.

You'll also appreciate an easy-to-use website, which can go a long way toward making the bonding process much easier, with conveniences like online bond placement and management. Our website is designed with service and simplicity in mind and offers key features such as:

  • Streamlined online applications
  • Immediate execution of bond documents
  • Instant approvals

How to Get a Surety Bond with PHLY

PHLY is a leading provider of surety services in the United States. We offer a comprehensive suite of surety bond products including contract, commercial, subdivision, and customs bonds. We bring dedicated expertise backed by a strong reputation, financial strength, and a total commitment to customer service.

Visit our Surety Bond page to learn about our convenient, online solutions and other options for obtaining:

  • Commercial Account Surety Bond
  • Commercial Express Surety (small accounts)
  • Contract Account Surety Bond
  • Contract Express Surety Bond (small accounts)

Building Strong Relationships

At PHLY, we understand that relationships are vitally important in surety. That's why our commitment to customer support is at the core of everything we do. We take the time to get to know the clients involved and see how we can best meet their needs. We strive from day one to build great relationships with clients and agents.

Part of our commitment to relationships means hiring and training the right people. Applicants looking to work for PHLY in surety undergo an intensive hiring process. The select few who do get hired then become part of our surety training program, which is designed to sustain excellence in surety leadership as well as enhance our PHLY customer service-oriented culture. Currently, 20% of our Surety team at PHLY are in the trainee program, and that's an intentional choice to continue our growth and build for the future. First and foremost, we invest in people - because we know that's always a worthwhile investment. Whether it's agents, their clients, or our own employees, we put in the work to establish strong relationships across the board.

Strong relationships along with an impressive size and reputation, all built on a customer-centered approach. That's the way PHLY does surety. If your clients are wondering, Where can I get a surety bond, visit our surety product page to learn more today.

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