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Indiana Passes Surety Bonding Bill for P3 Projects
Bill Provides Additional Protections for Workers, Local Businesses and Taxpayer Money
April 9, 2019, Washington, D.C. – Indiana HB 1374, sponsored by Indiana State Rep. Matt Lehman, headed to Governor Holcomb?s desk for signature on April 8. The bill amends all three of the state?s public-private partnership (P3) laws to require a 100 percent payment bond and a 50 percent performance bond on these types of state infrastructure projects. The Indiana House passed the measure with a vote of 93 to two, while the Indiana Senate passed the measure with a vote of 48 to zero.
?Indiana took an important step to protect workers, small businesses and taxpayer money on P3s projects. We commend the Indiana legislature for recognizing the value of surety bonds,? says SFAA President Lee Covington. ?No other risk management product provides the same comprehensive protection as surety bonds. Thank you to Rep. Lehman, and to all those involved for passing this important piece of legislation.?
P3s provide a new method of financing for public infrastructure projects. A P3 is a way for governments and agencies to access the capital market, but the construction risk remains the same. According to BizMiner, more than one out of four contractors fail. Surety bonds significantly increase the likelihood that a construction contract will be completed, and that subcontractors, suppliers and workers will be paid. No matter the project delivery method, surety bonds help public agencies assess and minimize their risk.
For more information on the value of surety bonds, visit www.surety.org.
The Surety & Fidelity Association of America (SFAA) is a trade association of more than 425 insurance companies that write over 98 percent of surety and fidelity bonds in the U.S. SFAA is licensed as a rating or advisory organization in all states and it has been designated by state insurance departments as a statistical agent for the reporting of fidelity and surety experience.