Surety is a credit instrument known as a bond guarantee. It is not insurance. A firm called a "surety company" guarantees that a business corporation called a "principal" will carry out an obligation to a third party, called an "obligee." Two examples of such obligations include:

1. A contractor constructing a site according to the contract specifications for the owner; and
2. A firm supplying goods within a predetermined time frame to a third party.

If the principal does not fulfill its bonded obligation, the obligee can make a claim demanding that the surety company satisfy the obligation or pay the bond penalty. The surety company has the right to reimbursement from the principal in the case of a paid loss or claim.

Marsh's Surety Practice employs over 210 specialists who provide consulting and brokerage services to our clients. The Practice consists of three specialties:

• Construction Surety provides in-depth industry knowledge, solutions, project analysis, contract review and day-to-day construction bond execution services. Examples of these bonds include Construction and Environmental - Performance, Payment, Supply, Maintenance and Warranty Bonds.
• Commercial Surety obtains the best capacity at the lowest cost for all corporate surety needs. Examples of these bonds include Court Appeal, Bank Depository, Mining Reclamation, Landfill Closure, Workers' Compensation Self-Insurers and Custom Tax Guarantees.
• International Surety examines the unique surety requirements internationally. Specialists negotiate surety credit to replace letters of credit thereby creating additional bank lending capacity for clients. Examples of these bonds include Advance Payment, Trade Guarantees, Construction, Performance, Warranty and Maintenance Bonds.

Among Marsh's placement, consulting and transaction services are:

• Financial Analysis and Benchmarking
• Surety Risk Profile Analysis
• Bond Approval and Execution
• Contract Review & Analysis
• Bond Placements and Negotiations
• Indemnity Analysis & Negotiations
• Surety Captive Feasibility Study
• Surety Company Proposal Analysis
• Bond Claim Advice
• Strategies to Increase Surety Capacity
• Strategies to Reduce Surety Costs
• Subcontractor Risk Management Analysis
• Surety Submission Preparation
• Surety Stress Test
• Surety Rate Benchmarking
• Bond Form Language Review & Analysis
• Surety Bond List Reports

Clients can access Marsh's MSURETY system through our secure Client Access portion of our Web site. This Web-based bond system enables clients to order, track and report their bonds through the Internet.