Why does the surety want my personal financial statement and net worth before writing a bid bond?

The surety wants your personal financial statement and net worth because they are taking on a risk when they issue a bid bond for your company. A bid bond guarantees to the county that you will enter into the contract if you are the low bidder. If you back out, the surety pays the county the difference between your bid and the next lowest bid, up to the bond amount. The personal indemnity agreement means you, as the owner, personally guarantee the company's obligations to the surety. The underwriter looks at your personal finances to assess your ability to repay the surety if they have to pay out on a claim. They also review your business financials to understand the company's financial health, cash flow, and overall capacity to complete the project. This helps them determine the risk involved in bonding your company for the paving job.

The surety wants your personal financial statement and net worth because the personal indemnity agreement makes you, the owner, personally liable for any losses the surety incurs if your company defaults on the bond. Tom is right that the surety is assessing risk. The underwriter looks at your personal finances, including your net worth, to see if you have sufficient personal assets to cover potential claims if your business cannot. This is common practice, especially for small businesses where the business's financial strength is often closely tied to the owner's personal financial standing. They also evaluate your company's financial history to ensure it has the working capital and profitability to handle the project.