Surety Bonds and the COVID-19 Impact

The COVID-19 pandemic has affected every single industry, including surety bonds. That doesn’t come as much surprise considering that surety bonds are weaved into the fabric of the broader economy. Many professionals and businesses need them to operate legally, and most contracts aren’t complete until bonds are in place. When the outbreak of a global pandemic causes business activity across states and sectors to take an unprecedented plunge, one would only expect the surety bond industry to feel the impact.

What does that impact look like exactly? Rather than relying on our own experience to comment, we reached out to industry experts for different perspectives. We asked them about the impact of COVID-19 on applicant’s seeking surety bonds and on the companies that issue these bonds. The experts we spoke with have important insights to offer anyone involved with the surety bond industry at this uncertain time. These are the key takeaways:

Tough Times for Contractors

According to Dan Bailey at WikiLawn, the COVID-19 pandemic has put extra pressure on contractors of all types. “Contractors can only abide by the rulings of state governments and CDC guidelines. Many contracting projects haven’t been deemed as essential infrastructure, and surety bonds have little legal room to challenge this ruling right now.”

Moving forward, Bailey think contractors need to form partnerships with their bond provider. “There needs to be a stronger relationship between the contractor and those responsible for issuing surety bonds. Being able to deliver on the obligee’s needs regardless of current operating procedure is something that’s hard to trust if there’s no established relationship.”

Despite the hardships of the pandemic on contractors in particular, Bailey feels confident some relief is coming. “In general, I feel there will be more provisions moving forward to help ensure that the contractor is not unjustly pressured into satisfying a contract that brushes up against state or federal guidelines for handling the pandemic.”

Fewer Options for Bonds

Randy Charach, the personal finance expert behind INCOME.ca, offers a dire warning for both surety companies and those who depend on them. “There’s a large chance that contractors will need to rely on more than one surety provider as these providers will be looking to lessen their risks during this time.”

 Important as bonding may be, most contractors treat it like any other business requirement – something they want to manage effectively using the fewest resources necessary. Learning that bonding may now require relationships with more than one surety provider can only mean this business requirement will require more time, energy, and possibly money than it did previously.

Combined with the challenging business climate outlined in the previous heading, the outlook for contractors isn’t bright right now.

Complex Contract Clauses

Mark Strohl, Founder of Protax Consulting, warns that COVID-19 could add new levels of uncertainty to the construction process. “Contractors in this age of uncertainty should be taking extra care to note contract clauses that give the client or owner the right to suspend or even terminate the project if the suspension lasts for a certain amount of time. Contractors should make sure they are aware of these clauses and should keep an eye out for actions by owners that could be interpreted as a suspension even if it isn’t specifically named as one.”

Now, morose than before, contractors need to closely scrutinize contracts and potentially enlist the help of experts who can make sense of the details.

Key Takeaway – Pick a Great Surety Bond Partner

The common theme among all the people we spoke to is that the uncertainty of the present looks likely to carry into the future with no clear end in sight. As many of our experts noted, things don’t look great for contractors. Work won’t necessarily dry up overnight, and there’s no reason to think construction starts and home renovation projects won’t return to pre-pandemic levels soon. That being said, countless forces – some obvious, others invisible, all unpredictable – could throw the construction industry into relative turmoil for years to come.

Bond providers are an important asset in the midst of that turmoil. Since bonds are so instrumental to the construction industry – something that most projects can’t proceed without – contractors can’t afford for bonding issues to compound other sources of uncertainty in the industry. They need bonding to be a box they can check reliably and consistently, particularly if they’re going to remain competitive.  Some bond partners will go above and beyond to ensure contractors get the bond they need on schedule. Others won’t.

Viking Bond Service falls squarely into the first category. We understand the pressure facing contractors right now. We’re also well aware of how the bonding process can make life easier or harder for stressed-out builders. COVID-19 makes everything harder for everyone – but we’re dedicated to keeping the bonding process open to all and easy to access.

If you’re ready to pursue a bond, complete this online application at your convenience. For more information, call us at 1-888-278-7389 or use the contact form on this page.

Learn About Court Bonds

What’s a court bond? It’s a way for courts to hold defendants and plaintiffs accountable for paying financial judgments. When courts require someone to pay and they either can’t or won’t, the person they’re responsible for paying may file a claim against the surety bond. The surety company backing the bond will pay for all valid claims, and then they will collect the amount of the claim (plus interest and fees) from the original bond holder. For the bond holder (known as the principal) court bonds work like a line of credit. And for the beneficiary of the bond (known as the obligee) bonds guarantee they will receive the damages they are owed. 

Comprehensive Guide to VA Fiduciary Bonds

Some veterans require assistance to administer their Veteran’s Administration (VA) benefits. The fiduciary who provides that assistance has an important and sensitive job as the custodian of large sums of money that are critical to the veteran’s care and wellbeing. When VA benefits exceed $20,000, someone must obtain a VA fiduciary bond before they’re allowed to serve as a fiduciary. This is your comprehensive guide to those surety bonds

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7 Things to Know About Garnishment Bonds

When a creditor takes a borrower to court because of an unpaid debt, the creditor may seek what’s known as a garnishment. A garnishment gives the creditor the right to withhold a portion of the debtor’s wages from their employer or assets from their bank account until the amount of the debt is recouped. However, before granting that garnishment, the courts will usually require the creditor to prove they have a garnishment bond, which is a type of surety bond. This article outlines 7 things you need to know:  

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5 Big Upcoming Construction Projects in 2020

Across the country, major construction projects plan to either break ground or enter a major new phase over the course of 2020. The COVID-19 pandemic caught everyone off guard and forced some projects to delay or reconfigure. Nonetheless, there are still projects planning to move forward and working to put all the necessary plans and preparations in place before the end of the year – including securing any construction bonds necessary. Here are a few of the notable projects worth following along with:

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Important Things You Need to Know About a Trustee Bond

If you intend to serve as a trustee, you may need to obtain a trustee bond first. Here are some important things you need to know upfront:

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What is a Trustee Bond?

Before we answer questions about trustee bonds – one particular kind of surety bond – we should explain some of the terms and concepts involved. First, a trust is a financial vehicle set up during a person’s lifetime or after it as part of their will. Trusts contain funds which are distributed to particular persons or organizations based on terms dictated by whoever established and funded the trust. With a few exceptions, trusts can operate however someone intends.

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What is the Purpose of a Conservatorship Bond?

To answer that question, you need to understand how this particular kind of surety bond works, why the courts require one, and how it affects the parties involved. This piece explores the ins and outs.

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How Does a Writ of Attachment Bond Work?



If you’re involved in a civil case between a debtor (the defendant) and a creditor (the plaintiff), there may be a writ of attachment bond involved (sometimes just called an attachment bond or plaintiff bond). This piece outlines how the bond works, how it affects all the parties involved, and why the courts consider it so important.  Continue reading “How Does a Writ of Attachment Bond Work?”

5 Things You Need to Know About Conservatorship Bonds



If someone cannot manage their own affairs due to mental or physical limitations, they may become a “ward” of the state, meaning the government takes responsibility for their care and wellbeing. In this instance, the state will appoint a conservator to make decisions on behalf of the ward, including sensitive financial and potentially also medical decisions. The ward’s family typically appoints the conservator, but in some instances the state may appoint someone. In either case, the person nominated must obtain a conservatorship bond before being officially appointed. If you find yourself involved with this process, this blog outlines 5 things you need to know upfront: Continue reading “5 Things You Need to Know About Conservatorship Bonds”