OWNERS, CONTRACTORS AND SUPPLIERS BEWARE
In response to legal action taken by The Pennsylvania Insurance Department, The Commonwealth Court of Pennsylvania issued an Order of Liquidation for First Sealord Surety on February 8, 2012. The Department’s actions were likely prompted by A.M. Best’s downgrading of First Sealord’s insurer ratings from an A- rating to a C- rating late last year amidst growing concerns of the company’s declining capitalization.
This news will necessarily create significant concern throughout the construction/surety industry as surety bonds are not themselves typically re-insured against company failure. Owners whose Contractors or Subcontractors are currently bonded with First Sealord should contact them as soon as possible to arrange for substitute bonding on any ongoing projects. Contractors, Subcontractors and Materialman with potential bond rights against a First Sealord Surety bond should likewise consult with legal counsel as soon as practicable to determine what alternative lien rights they might have on any such projects and other measures that might be taken to preserve their interests and claims.
Jose A. Rodriguez, Esq.
The Soto Law Group, P.A.