Environmental Surety Bonds
Environmental bonds — which are required types of surety bonds needed for environmental contractors — are put in place to protect environmental integrity when large or small construction projects involve any number of environmental risks. They include performance and payment surety bonds when the contaminated property is being remediated, and license and permit bonds for landfills, wetland mitigation, and other industries which may impact the environment.
What are Environmental Surety Bonds?
Environmental surety bonds guarantee that contractors and other service providers will comply with federal, state, and local regulations and environmental policies. They are designed to prevent or repair environmental damage by covering construction projects and hazardous materials included in the bond terms.
Who Needs Environmental Surety Bonds?
- Coal burning by-product (fly-ash) storage utilities that require a closure bond
- Construction firms that encounter dirt projects containing environmental components, like asbestos, lead, and petrochemicals
- Contractors performing construction landfills
- Environmental consultants conducting their environmental remediation work
- Environmental remediation contractors who need extra bonding capacity
- Manufacturing companies whose processes generate by-products that remain in residual landfills
- Principals with environmental guarantees
What Does an Environmental Surety Bond Cover?
Contractors and service providers involved in the following activities typically require environmental surety bonds:
- Asbestos removal
- Contaminated material disposal
- Demolition of contaminated facilities
- De-watering system installation
- Environmental excavation
- Erosion control
- Landfill capping
- Landfill closure/post-closure
- Mining rehabilitation
- Sediment control
- Soil remediation
- Soil stabilization
- Underground tank removal
- Well plug and abandonment
What are the Types of Environmental Surety Bonds Needed for Environmental Contractors?
There are various types of environmental surety bonds to cover each unique situation and to ensure every project complies with important environmental policies, such as:
- Closure Bonds
- Decommissioning Bonds
- Landfill Bonds
- Post-Closure Bonds
- Reclamation Bonds
- Transfer Station Bonds
- Waste Hauling Bonds
- Wetland Mitigation Bonds
How Much Does an Environmental Bond Cost?
The cost of environmental surety bonds depends on the bond amount and any fees as determined by the terms of the bond set forth by the obligee. Another factor is the applicant’s financial information, including personal and corporate credit history, assets, and work experience. Those with excellent financials could pay a premium that is 1% to 3% of the total bond amount.
What is Required to get an Environmental Surety Bond?
Environmental surety bonds are a specialty bond that requires a knowledgeable and risk-based underwriting approach by a surety company. Brunswick Companies can help you select a surety that has expertise in dealing with mitigating environmental risks and adhering to environmental policies at state and federal levels.
To qualify, the surety underwriter will review your bonding capacity, credit, and character. Sureties require the following documents:
- Completed environmental surety bond application
- Bond Form from the obligee
- Financial documents, like bank statements, cash flow reports, revenue reports, irrevocable letters of credit, etc.)