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The Construction Connection - California Contractor News, Notes & Legislation

American Contractors Indemnity Company Contractor Bonds

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California contractors are perhaps more familiar with American Contractors Indemnity than any other surety in California when it comes to contractors license bonding and for good reason.  American Contractors Indemnity has quite possibly underwritten more California contractor license bonds over the past few years than any other surety.

How Do California Contractor License Bonds Work?

Contractor license bonds are legal contracts designed to protect the general public by guaranteeing contractors will adhere to all state laws and regulations as outlined in the California Business & Professions code or risk a bond payout, which in addition to resulting in a financial loss to contractors, can result in disciplinary action by the CSLB.  Unlicensed contractors are not bonded and as such, do not provide the same level of financial protection to consumers.

Is American Contractors Indemnity Company A Good Surety?

American Contractors Indemnity Co. has controlled a large portion of the California contractor’s bond market in recent times. One possible reason for this, is that ACI has developed a strong understanding of the contractor’s bond business by adapting and evolving through several fluctuating economic cycles, giving it experience to properly price bonds for the long term.  A conservative pricing discipline may also contribute to its financial strength. As of 2020, American Contractors Indemnity has a financial rating of AA (Very Strong) by Standard and Poor’s and A+ (Superior) by A.M. Best Company.¹

Why Use American Contractors Indemnity Co. for Your Contractors License Bond?

American Contractors Indemnity is a unique surety that for the better part of the last decade was also arguably one of the more competitive surety’s for many California contractors.  Among other advantages, ACI is one of a relatively small group of sureties willing to write bonds for pool and roofing contractors and they’re often willing to consider underwriting bonds for contractors with very poor credit.  Broad underwriting guidelines and experience may have contributed to ACI’s strong market share, though contractors should still be diligent in thoroughly evaluating their bonding options upon renewal each year if they are unhappy with their rate.  Competitive changes can occur rapidly amongst many sureties in the California contractor’s license bond arena.

Contractors in California have many choices when it comes to obtaining a license bond, so it may make sense to get quotes from multiple sureties, otherwise they may be missing out on substantial premium reduction opportunities they may not have otherwise known about.  Each surety has unique underwriting guidelines that can cause substantial rate differences based upon a contractor’s background and credit profile.

HCC Surety & American Contractors Indemnity – What’s The Relationship?

American Contractors Indemnity Contractor Bonds ImageCalifornia contractors bonded through American Contractors Indemnity are often confused by the fact that their license bond ID card also references HCC Surety.  While often thought to be separate and unaffiliated companies, American Contractors Indemnity is actually a subsidiary of HCC Surety.  American Contractors Indemnity was founded in 1990 and was subsequently acquired by HCC Surety in 2004.  Today, American Contractors Indemnity is a Los Angeles, California domiciled surety specializing in license, contract, court, and permit bonds.¹

By Jeremy Schaedler


Source Citation:

¹AM Best

About the Author:

Shortly after graduating from the University of California, Los Angeles with a bachelors degree in economics, Jeremy founded Surety First Insurance Services (formerly Schaedler Insurance), a Northern California based insurance agency specializing in surety bonds for California construction professionals. Jeremy is happily married and the proud father of two young boys. In his free time, he enjoys camping, fishing and shooting the breeze with friends and family.


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