Surety bonds are such a regular part of our business world today that it is hard to imagine a time where we didn’t have them. In a previous blog, we mentioned that the first form of a surety bond occurred in 2750 B.C. We wanted to investigate a little more about the history of surety bonds. So, join us, as we take a short trip down surety bond memory lane!
- 2750 B.C. It all starts with our farmer friends in Mesopotamia, where one friend goes off to serve in the army and creates an agreement with another farmer to take care of his fields while he is away. In order to ensure this, a third party (a merchant) guaranteed that the second farmer would uphold his agreement.
- Later, in 2400 B.C. we find our first written surety bond, on a stone tablet. The surety guaranteed that one party would pay the other party.
- Fast forward a few hundred years, to 1790 B.C. and we find the law Code of Hammurabi, with the first legal surety document.
- We’re moving along here to 670 B.C. where we find our first written surety contract, written closer to how we understand surety bonds today.
- Now, let’s skip on over to the Roman Empire from the Middle East to find the Romans developing laws of suretyship in 150 A.D.
- Put on your leaping shoes, as we jump all the way to 1837 when William L. Haskins founded the first surety company in America, otherwise known as The New York Guarantee Company.
- A few decades later, in 1857, again in New York, a law is passed that establishes corporate surety companies.
- Less than a decade later, in 1865, Fidelity Insurance Company is founded and becomes the first corporate surety firm in the USA.
- Now, we find ourselves at the turn of the century in 1894 with the Heard Act. This act required all federally funded construction projects to be bonded.
- We enter a World War and find ourselves on the other side in 1931, where The Handbook of the Law of Suretyship and Guaranty is published.
- Now this is where we start to see more direct links to our current understanding of surety bonds. In 1935 the Federal Miller Act is passed, which requires performance surety bonds for all public work contracts over $100,000. It also required a mandated payment protection for contracts over $25,000.
- Seven years later, in 1942 the National Association of Surety Bond Producers (useful acronym of NASBP) was established. This is an association which is utilized today by surety bond producers for its vast resources.
- 1966, Surety Bond Professionals – Mark Leskanic was born.
- 1988, Mark graduates from Providence College and commences his surety career at the Seaboard Surety Company in Bedminster, NJ.
- 2014 Mark ventures out to start his own surety bond-only agency, Surety Bond Professionals in Needham, MA with one employee.
- 2015 SBP adds two more members to the team.
- 2016 Mark brings his son Matt onto the team to help with business development and underwriting.
- Today, SBP strives to offer our “business family” with unsurpassed attention and support to ensure a mutually beneficial relationship, believing that success for everyone is only possible through helping all of our constituents achieve their goals and objectives.
Surety bonds have been a vital part of business, as we have learned, since the beginning of our modern (and even farther back!) times. A surety bond helps to ensure that business transactions, construction projects and other industries adhere to a written contract. A third party (the surety bond producer) acts as a source of objectiveness, making sure that everything goes smoothly.