At Surety Support Services we look forward to serving you in 2018. We begin this year with a new website that offers you new ways to communicate, more bond information and easier ways to purchase bonds. Throughout the year we will offer more blog content and new interactive features to the site.
We built this blog section to focus on product descriptions and updates. Also, we will keep contractors, business owners and our partnering agents up-to- date on the latest changes in bond regulation and requirements.
As we kick off this series we put a spotlight on Land Reclamation Bonds. These bonds have a variety of purposes, each having its own challenges including complicated regulations, long term obligations and strict underwriting parameters. Regulations for these bonds are required by federal agencies and in most states, land management agencies.
Oil Drilling Bonds- When a drilling company wants to break new ground on a drilling site part of the regulatory requirements is to obtain an Oil Drilling Bond. These bonds insure the company will conduct the drilling process in an environmentally responsible manner and take any necessary steps to prevent or solve environmental issues. The bonds are issued after a thorough vetting of the company’s business plan, track record and financial situation. They are necessary as long as the drilling site stays in operation. Oil Drilling Bonds typically have a set term for renewal, usually annual where the company goes through an underwriting review process.
Oil Well Plugging Bonds– Once drilling ceases, the company must guarantee proper plugging of the well and return the adjacent land to its original condition. Bond amounts and length of terms vary by each job and by the state where drilling occurred.
Surface Mining Bonds- Just like oil drilling, surface mining is a heavily regulated industry. Usually under state law, a surety bond is required to ensure the mining company follows proper procedures during the mining process and the land reclamation process. Once mining ceases, the company must return the land to its original condition. Mining and reclamation permits can last many years, so one reason why Surface Mining bonds are considered hazardous is due to their “long tail liability.” There may be cancellation provisions in the bond form that allow the surety to “get off the bond”. However, if a principal doesn’t replace the bond within the cancellation period, the surety might be forced to immediately forfeit the entire bond penalty. Surface Mining Bonds typically have a set term for renewal, usually annual where the company goes through an underwriting review process.
Landfill Bonds- Landfill operators must obtain a surety bond when opening, expanding and operating a landfill. Depending on the terms of the bond, the length of the obligation could be decades. There is also a period time after the closure of a landfill that the bond obligation must hold. These operational bonds are often difficult to underwrite because they are, in practical terms, open ended. These bonds require annual renewal and underwriting review.
Every company that operates to extract or use land ultimately must satisfy the requirements set forth by the communities where they operate. When choosing a bond company, you want someone who understands your business and can help you obtain the best deal. At Surety Support Service we have spent 40 years building a business helping companies like yours. We get you the best terms and the best rate for your Land Reclamation Bond, and we fulfill your bond needs quickly, so you can get back to business.
Want to know more? Call us at (866) 385-7760