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New Jersey taxpayers are on the hook for an extra $10 million after the state Supreme Court upheld a decision to toss the lowest bid for a major bridge project over a paperwork error. n a ruling released Monday, May 5, the justices voted 5-2 to back the New Jersey Turnpike Authority’s decision to reject a $70.8 million bid from El Sol Contracting and Construction Corp. for failing to properly authorize a key legal document (see attachment). El Sol’s bid was the lowest by nearly $10 million. But according to the Court, the company didn’t submit a valid Consent of Surety — a document that guarantees a bonding company will back a contractor if awarded a job. The issue? El Sol’s surety, Liberty Mutual Insurance, submitted a Power of Attorney that only covered the bid bond, not the Consent of Surety. “Because of the defect in Liberty’s PoA, El Sol did not submit a CoS that validly bound Liberty to execute the Contract Bond, and its bid was therefore incomplete,” wrote Justice John Hoffman for the majority. The project is part of a multi-year redecking effort to repair 11 bridges in the Newark Bay area. The contract was ultimately awarded to the second-lowest bidder — Joseph M. Sanzari Inc. — for $80.7 million in August 2024. In a sharp dissent, Justice Douglas Fasciale slammed the decision, saying El Sol had followed the same bidding process it used on 13 previously accepted contracts. “The NJTA’s disqualification of El Sol is arbitrary, capricious, and unreasonable,” he wrote, “and its findings are not supported by credible evidence in the record.” https://dailyvoice.com/new-jersey/hackensack/nj-taxpayers-owe-extra-10m-after-court-tosses-bridge-bid-over-paperwork-mistake

Global insurance broker Marsh USA filed suit against competitor Aon and a former Marsh team leader for allegedly poaching key members of Marsh’s construction surety team who resigned and moved to Aon last month. A complaint filed by Marsh in federal court in New York accuses Aon and its former construction and surety team leader, Robert McDonough, of a “brazen taking” of its construction surety business, including its confidential information, employees and clients. According to the lawsuit, the scheme culminated with the “coordinated resignation of 20 employees in the span of just 38 minutes” on March 10, 2025. As a result of the alleged raid, Marsh said it lost numerous clients representing millions of dollars in revenue annually and has suffered harm to its client relationships and its reputation and goodwill in the brokerage industry. “Aon could not execute the plan to raid Marsh alone—it needed an inside man and enlisted McDonough, a senior leader in Marsh’s construction surety business unit, to use his knowledge of Marsh’s confidential information and his relationships with Marsh’s employees and clients to advance an unlawful scheme and raid Marsh’s construction surety business,” according to the complaint. Aon declined to comment on the lawsuit when contacted by Insurance Journal. Aon Lost Own Team The lawsuit contends that the scheme began before McDonough and the others left Marsh, soon after Aon lost a team of its own surety employees to another competitor in January. “Rather than invest the time and money to rebuild its surety practice piece by piece, Aon opted for a quicker, unlawful fix: simply pluck a significant portion of Marsh’s construction surety business unit to fill its need,” the lawsuit says. McDonough joined the Marsh construction surety team in New York in March 2016 as the practice leader and he maintained that senior leadership role for nearly a decade. According to Marsh, McDonough was privy to its highly confidential information and trade secrets, including information about Marsh’s workforce and clients. McDonough is accused of leading the mass resignation on March 10 when he submitted his resignation at 10:45 a.m. and 19 others followed his lead, including 70% of McDonough’s direct reports. On March 17, the suit contends, McDonough assumed a comparable role at Aon, as CEO of its North American construction, infrastructure, and surety group. The 19 other Marsh departing employees also assumed similar roles at Aon—”essentially mirroring the structure and roles of Marsh’s construction surety business,” the complaint says. In a March 10 press release, Aon touted new leadership for its construction and surety practice, with the hiring of McDonough and another key Marsh employee, Brian Hodges. Marsh contends that McDonough has breached non-solicitation, confidentiality and other agreements he signed prior to beginning his employment at Marsh in 2016. The agreements establish that McDonough’s violation of their restrictive covenants would result in irreparable injury to Marsh and they set forth penalties should he violate them. The non-solicitation agreement acknowledges that the restrictions are necessary to protect the legitimate business interests of the company and are reasonable in view of the consideration and benefits, including access to bonus plans, he has received from the company. ‘Irreparable Harm’ Additionally, in his confidentiality agreement, McDonough is said to have agreed that “irreparable injury will result” to Marsh and that, in the event of a breach, Marsh shall be entitled to specific performance and temporary and permanent injunctive relief, recovery of reasonable sums and costs, including attorneys’ fees, and any other legal remedies and damages available. In addition, Marsh says McDonough signed a liquidated damages agreement that covers situations where a client either reduces the amount of business or cancels business with Marsh due to violations by him. This provision calls for him to pay Marsh an amount equal to the total fees and commissions received by the company for such business during the two years prior to the breach. That would be in addition to all other damages and remedies, according to the lawsuit. According to the complaint, as part of the collusion, Aon worked with McDonough to recruit the 19 employees to Aon, drawing upon his knowledge of Marsh’s confidential personnel data related to compensation and client contacts. Further, Marsh alleges that McDonough worked with Aon to identify Marsh clients— “particularly ones with which McDonough had strong relationships—to move their business to Aon.” This drew upon Marsh’s confidential information about the clients’ current contracts with Marsh, Marsh’s pricing, Marsh’s business development strategies, and client preferences, the complaint says. Marsh personnel spoke with many of the departing employees after they resigned. Marsh says these interviews “confirmed McDonough and Aon’s plot to steal Marsh employees as a group.” One of the departing employees reported that the raid was “all orchestrated by Rob McDonough,” who, the employee said, “selected the best 20 people in the practice to leave together” and told him he had the choice to either “take life changing money and stay with us or be left behind and clean up the puke.” Marsh Cllients According to Marsh, the scheme also targeted both established and potential Marsh clients, including one with a major infrastructure project and another with a transportation facility construction project, allegedly using Marsh’s confidential information to get them to move their business to Aon. Marsh also contends that McDonough and another Aon employee recently attended an industry conference in San Deigo where Marsh maintains they “actively targeted” Marsh employees and clients “in what could only be an effort to solicit them on behalf of Aon.” Among the complaint’s counts are unfair competition; breaches of contract, fiduciary duty and common law duties of loyalty, absolute candor, and good faith; tortious interference with business relationships; aiding and abetting a breach of fiduciary duty; and conspiracy. In addition to liquidated damages, Marsh is seeking punitive damages, actual damages, attorneys fees, and preliminary and permanent injunctive relief. https://www.insurancejournal.com/news/national/2025/04/22/820698.htm

The Eighth Circuit has affirmed that Liberty Mutual’s bond obligation did not extend to a subcontractorIn a dispute arising from a federal power infrastructure project, the Eighth Circuit Court of Appeals ruled in favor of Liberty Mutual Insurance Company, finding that the insurer was not liable under a performance bond for payments sought by a subcontractor that lacked contractual privity. The April 2025 decision affirms a lower court ruling and reinforces the enforceability of assignment restrictions and formal contractual obligations in surety arrangements. The litigation originated from the construction of the VT Hanlon Substation in Montrose, South Dakota, contracted by the US government through the Western Area Power Administration (WAPA). The original contractor, Isolux, failed to complete the project by the required deadline, prompting WAPA to terminate the contract. At the time, Liberty Mutual and the Insurance Company of the State of Pennsylvania (ISOP) had jointly issued both performance and payment bonds to secure Isolux’s obligations. Following the termination, Liberty and ISOP, acting as sureties, engaged Professional Construction Consulting (PC2) to evaluate the site and identify a new contractor. Jeff Bruce—owner of two distinct entities, E&I Global Energy Services, Inc. and E&C Global, LLC—entered discussions with PC2. Ultimately, E&C was named in a March 2017 tender agreement and in the subsequent completion contract as the contractor responsible for finishing the project. E&I was listed in the contract as a subcontractor. Though E&I performed the bulk of the work due to E&C’s inability to obtain a necessary bond, Liberty Mutual refused to pay E&I directly for certain items excluded from the base completion price. E&I and E&C jointly filed suit in February 2020, asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, fraud, deceit, and negligent misrepresentation. The US District Court for the District of South Dakota granted summary judgment to Liberty Mutual on the unjust enrichment claim, finding that the plaintiffs had acknowledged a valid and enforceable contract, thereby precluding equitable remedies. Following a bench trial, the court ruled in favor of Liberty on all remaining claims. It held that Liberty’s payment obligation ran solely to E&C under the completion contract, and that there was no evidence of a valid assignment of contractual rights from E&C to E&I. The completion contract contained a non-assignment clause, barring the transfer of rights without prior written consent from both WAPA and the sureties. No such consent was ever provided. The court further concluded that the plaintiffs’ fraud and misrepresentation claims failed due to lack of intent to deceive and the absence of justifiable reliance. Although Liberty’s agent had mistakenly indicated that certain project documents included all revisions, the court credited his testimony that he believed Bruce had access to the missing materials. Bruce acknowledged knowing he lacked complete documentation at the time of his bid but chose to proceed under WAPA’s direction. The court found that such awareness undermined any claim of reasonable reliance. The district court also excluded a supplemental expert report that estimated an additional $3.69 million in “loss of enterprise value” damages. The court deemed the report untimely and not a proper supplement, emphasizing that the information it contained had been available earlier. The plaintiffs’ request for lesser sanctions, such as reopening discovery, was denied to avoid delaying the proceedings. On appeal, the Eighth Circuit affirmed the district court’s rulings in their entirety. The appellate court held that the plaintiffs failed to timely request a jury trial and that the exclusion of the expert report was not an abuse of discretion. It also upheld the trial court’s findings that Liberty Mutual had no contractual obligation to E&I, that no valid assignment had been established, and that the fraud and misrepresentation claims lacked merit. While the case did not interpret insurance policy language per se, it turned on obligations under a performance bond and a completion contract—core instruments in construction insurance. The decision reaffirms the legal significance of non-assignment clauses and strict adherence to formal contracting procedures in limiting surety liability. For insurers and surety providers, the ruling provides a clear illustration of how courts enforce the boundaries of liability based on documented contractual relationships and express consent requirements. https://www.insurancebusinessmag.com/us/news/construction/liberty-mutual-avoids-liability-in-performance-bond-dispute-with-subcontractor-532202.aspx

The 2025 Credit and Surety Market Survey by Axa XL polled 31 senior professionals from 28 companies across the globe (File photograph) The global credit and surety insurance sector has shown steady growth despite ongoing economic and geopolitical uncertainty, according to the 2025 Credit and Surety Market Survey by Axa XL. The survey, based on interviews with 31 senior professionals from 28 companies across Europe, North and South America, the Middle East and Asia, found that 60 per cent of respondents had seen strong premium growth since the pandemic. Key drivers included inflation, renewed infrastructure investment and increased demand from banks. But while the market has expanded, challenges are mounting. Ninety per cent of respondents said they expected loss ratios to worsen in the near future, with notable stress in the political risk and contract frustration sectors, particularly in countries such as Ghana, Zambia, Niger, Russia and Ukraine. “After the 2007-08 financial crisis, the market enjoyed a long period of stability,” said Felix Winzap, Axa XL’s head of credit and surety in his foreword. “But a series of events ― Covid-19, the war in Ukraine, instability in the Middle East ― have brought back uncertainty. We felt it was time to analyse the impact of these developments on the sector.” In the surety market, most respondents also reported substantial premium growth, with inflation and Covid-era stimulus programmes contributing to the uptick. While half said loss ratios had deteriorated somewhat since the pandemic, all agreed that overall loss levels remain manageable. The report found that banks continue to increase their use of credit and surety products, particularly where insurance can provide capital relief under updated Basel IV banking regulations. Seventy-five per cent of respondents said bank-related business had grown since 2022 and was expected to continue on that path. Artificial intelligence is also making inroads. Forty-three per cent of surveyed companies said they are already using AI tools, mostly in underwriting and risk analysis. Another third are in the testing or planning phase, with most developments happening in partnership with outside providers. The report also looked at how insurers are responding to environmental, social and governance concerns. While a number of companies are supporting the energy transition, only a minority have made ESG a formal part of underwriting or risk evaluation. Just 23 per cent reported net-zero targets. https://www.royalgazette.com/international-business/business/article/20250408/credit-and-surety-market-grows-amid-uncertainty

US Fire’s attempt to compel $13.5M in collateral for three decommissioning bonds failed—New York court says no imminent loss or asset risk justifies injunction A New York Supreme Court judge has rejected efforts by Crum & Forster owned US Fire Insurance Company to compel affiliates of MLCJR, LLC to post $13.5 million in collateral tied to surety bonds issued for offshore oil and gas operations, ruling the insurer failed to demonstrate the kind of immediate harm required to obtain preliminary injunctive relief. Justice Margaret A. Chan denied two motions from US Fire, finding that the company had not met the “irreparable harm” standard necessary to justify forcing the plaintiffs to post security under a General Agreement of Indemnity (GAI). The dispute arises from three surety bonds issued by US Fire in favour of the Bureau of Ocean Energy Management (BOEM) and Union Oil Company of California (UNOCAL). The bonds, totalling $13.5 million, were issued to guarantee decommissioning obligations of three offshore operators—Energy XXI, EPL Oil & Gas, and Cox Oil Offshore—all of which filed for bankruptcy in 2023. Their cases were subsequently converted to Chapter 7 liquidation proceedings. Following those filings, both BOEM and UNOCAL issued claims under the bonds, prompting US Fire to demand collateral from the indemnitors, as permitted under Paragraph 3 of the indemnity agreement. That provision allows the insurer to demand irrevocable letters of credit or other forms of security, at its sole discretion, upon receipt of claims—even before paying out any losses. US Fire argued that the plaintiffs’ failure to post collateral risked undermining the contractual framework of the surety relationship. The GAI explicitly waives the indemnitors’ defences and states that specific performance is an appropriate remedy. But Justice Chan concluded that US Fire had not shown it was facing immediate financial exposure. The insurer acknowledged it had not yet paid any claims or established reserves related to the bonds, and offered no evidence that losses were imminent. “There has been no showing made on US Fire’s application that, beyond the existence of the BOEM, UNOCAL, and BOEM II claims and US Fire’s collateral demands, there is any risk of imminent—rather than remote or speculative—harm,” Justice Chan wrote. The court also distinguished the case from Atlantic Specialty Ins. Co. v. Landmark Unlimited, Inc., where injunctive relief was granted in part because the surety had set aside reserves and the indemnity agreement expressly stated that non-payment of collateral would constitute irreparable harm. US Fire’s GAI contained no such clause. While Justice Chan acknowledged that the insurer might ultimately be entitled to specific performance if it prevails on the merits, she emphasized that “the requirements for the grant of a preliminary injunction are more stringent” and demand a present, concrete threat of harm. With the motions denied, the underlying litigation – including US Fire’s counterclaims and demands for collateral – will proceed to a full hearing. https://www.insurancebusinessmag.com/us/news/claims/judge-denies-crum-and-forsters-us-fire-insurance-companys-13-5m-collateral-demand-in-bond-case-530526.aspx

Outdated processes and regulatory confusion are slowing down Canada’s surety industry just as infrastructure investments and complex projects ramp up By Chris Davis As Canada increases infrastructure spending, the industry should consider integrating AI-assisted surety practices to keep pace. Outdated bonding processes threaten project delays, forcing contractors and underwriters to adapt or risk falling behind.   With digitization and regulatory shifts accelerating, Dustin SanVido (pictured), a senior account executive at AI Insurance, has seen how the industry evolves. His message to skeptics and traditionalists? Stop blaming AI and embrace it.    A key example of this is how electronic authentication tools like DocuSign have virtually eliminated the need for paper bonds. This transformation has done more than speed things up. Processes are smoother, there are fewer errors, and transactions move faster.  “It’s scarce that you run into a municipality or a township still looking for that paper. We’ve completely adapted on the construction side,” SanVido said. “The industry is very happy, and we’re all making more money. At the end of the day, that’s what surety is here to do—to make the contractors money.”  Regulatory Shifts Are Reshaping the Industry  Beyond digital transformation, regulatory changes are also reshaping the surety landscape. The global surety market was valued at $18.19 billion in 2023, with revenue expected to grow to $27 billion by 2030, driven by evolving regulations and increased infrastructure investments.  One notable development is Ontario’s new Planning Act, which came into effect in late 2024. Under the old system, developers used irrevocable letters of credit and other direct collateralization methods with these owners requiring security—none truly protected their investment when developers were brought onto a project. The new framework changes that.  “This instrument is considered on-demand and provides similar security as an irrevocable letter of credit (ILOC)”, SanVido said. “Right in the bond framework, claimant places a default claim, and surety has 15 days to pay. This allows the contractor/developer to deploy capital elsewhere as opposed to tying up in a bank for an indeterminate amount of time.”  This fast-tracked claim process is great for developers but has made underwriters more cautious. “Bonding companies are more conservative in their underwriting because they won’t apply the same underwriting metrics, they would to a traditional contractor because of that claim trigger,” he said. But the rollout has been chaotic. The result? It was a slow and muddied transition. “There isn’t an agreed-upon framework in the wording itself,” SanVido said. “So, from township to township, city to municipality, no one uses the same framework yet. It’s a wait-and-see approach right now. The sureties will, long term, agree to a single common form, and it’s learning as we go.” Risk Assessment Is No Longer Just About the Three C’s For decades, underwriting in surety has been built on the “three C’s”: capital, character, and capacity. Capital measures financial strength. Character assesses organizational stability. Capacity ensures the contractor can handle the job. But now, two more C’s have entered the equation: cash management and communication. “Cash management has become a large concern with underwriters,” SanVido said. “They’re not just looking at whether there is money but how it’s being managed—shareholder loans, cash and debt balances, working capital efficiency.” Communication is just as crucial, as underwriters now factor in how responsive and engaged a contractor is. “We are in the age of AI; we’re in the age of remote work. Communication is becoming so much more important—promptness, accountability, transparency, availability,” SanVido said.” If you’re someone who’s quick to provide the information, if you’re open and spending the time learning and developing that relationship, it’s become such an important factor.” Estate bonds: Myths, costs, and the fight for awareness Beyond contract surety, fiduciary bonds play a critical role in estate administration, yet many misunderstand their necessity and function. Executors and administrators often assume that only large estates require bonding, leading to confusion about legal triggers and financial responsibilities. “I have requests where it is down to a $1,000 estate, $5,000 estates,” he said. “The triggers are in place; the legislation currently is still what it is.” Cost is another major misconception. Many believe estate bonds are prohibitively expensive, deterring executors from exploring their options. “When you get into seven-figure and eight-figure estates, that number can grow,” SanVido said. “Even at rates that are universally under 1%, those become big numbers, and that can be discouraging for people.” However, the biggest challenge isn’t cost—it’s awareness. Some professionals in the legal field don’t even realize when estate bonds are required, creating gaps in estate planning and administration. “It’s 2025, and I’m the only specialist out there who’s consistently teaching law firms, consistently trying to speak at Association events and educate them on the whole,” he said. Lawyers themselves often don’t understand estate bonding nuance, SanVido said. “The first conversation I have with a lawyer is, ‘I’ve practiced law for 30 years. I’ve never needed one of these things. How do we do this?’ That is the most common question I receive in the legal profession in Canada,” he said. To change that, he’s pushing education—seminars, webinars, conference presentations. He highlights how surety professionals need to reconsider how we provide typical bonding solutions to our product industries. The future: AI and specialized bonds are taking over Two forces are reshaping the future of surety: artificial intelligence and the rise of specialized bond instruments. But can AI truly replace human underwriters? SanVido is skeptical. “AI is coming; it’s already here in the United States surety market, and it’s only a matter of time before it’s adapted in Canada,” he said. “I think AI is accurate for tangible underwriting and administration. I think it’s great for suitable analytics and automating workflow processes. But I don’t believe that it can assess the character of an organization.” Surety relies on trust, relationships, and gut instinct. “I don’t think there’s a way that AI can currently replicate that,” SanVido said. At the same time, specialized bonds are gaining traction, as is the need for subcontractor bonding programs and mid-tier

WASHINGTON, DC / ACCESS Newswire / March 3, 2025 / The Surety & Fidelity Association of America (SFAA) and the National Association of Surety Bond Producers (NASBP) led a Legislative Fly-In with members from across the industry to educate Congress on the value of construction surety bonds and advocate for key legislative priorities. These important meetings with policymakers focused on expanding support for the bipartisan Water Infrastructure Subcontractor and Taxpayer Protection Act (S.570 / H.R.1285), which would strengthen the Water Infrastructure Subcontractor Finance & Innovation Act (WIFIA) program by requiring appropriate bonding for all projects, including public-private partnerships (P3s). This bipartisan legislation was introduced by Senators Mark Kelly (D-AZ) and Kevin Cramer (R-ND) and Representatives Mike Bost (R-IL) and Chris Pappas (D-NH) on February 13 of this year. Surety professionals held over 135 meetings with policymakers and staff to emphasize the significant savings that surety bonding provides to taxpayers across the country. Using data from the Ernst & Young (EY) study, The Economic Benefits of Surety Bonds, industry leaders reinforced that surety bonds safeguard taxpayer dollars, ensure project completion, protect subcontractors, suppliers and workers, and drive economic growth. “SFAA members engaging with federal policymakers is a vital part of our advocacy mission, ensuring Congress understands the essential role of surety bonds in supporting and safeguarding public infrastructure projects,” said Ryan Work, President and CEO of SFAA. “Working with our industry partner, NASBP, our critical engagement with Congress strengthens and engages members on key issues affecting our industry.” “The needs of the Nation’s critical infrastructure are readily apparent, and surety bonds guarantee that these projects will be delivered, protecting the investments of taxpayers,” commented Mark McCallum, CEO of NASBP. “The story of surety’s benefits is compelling and one that each new Congress must understand as it legislates for the country’s advancement. My thanks to all those surety professionals who took the time to tell the story to their members of Congress,” McCallum added. During these joint meetings, industry leaders emphasized the critical role of surety bonding in federal infrastructure projects. Discussions included the importance of bonding requirements for WIFIA, ongoing P3 projects, the Broadband Equity, Access, and Deployment (BEAD) program, and other initiatives supporting the nation’s infrastructure. NASBP and SFAA also hosted a special event featuring insights from former Congressman and U.S. Transportation Secretary Ray LaHood and a panel discussion with Jack Ruddy, the Majority Staff Director of the U.S. House of Representatives Transportation & Infrastructure Committee. SFAA and NASBP look forward to our continuing dialogue with Congress, the Administration, and Federal Agencies to advance key priorities that support projects across the country. To read the EY report and get additional information on the value of surety, visit www.surety.org/suretyprotects. The Surety & Fidelity Association of America (SFAA) is a nonprofit, nonpartisan trade association representing all segments of the surety and fidelity industry. Based in Washington, D.C., SFAA works to promote the value of surety and fidelity bonding by proactively advocating on behalf of its members and stakeholders. The association’s more than 425 member companies write 98 percent of surety and fidelity bonds in the U.S. For more information visit www.surety.org. https://www.accessnewswire.com/newsroom/en/government/surety-industry-unites-on-capitol-hill-to-advocate-for-key-legislative-priorities-994562

CHICAGO — PMC Casualty Corp. argues that an Illinois federal judge properly denied Virginia Surety Company Inc.’s motion to dismiss a lawsuit accusing it of failing to remit $20 million allegedly owed under a vehicle service contract reinsurance agreement. In a Feb. 25 opposition filed before Judge Matthew Kennelly of the U.S. District Court for the Northern District of Illinois, PMC says Virginia Surety does not identify a legitimate basis for reconsideration by establishing either a “manifest error” in the opinion or newly discovered evidence. https://www.harrismartin.com/publications/14/reinsurance/articles/54520/reinsurer-says-judge-properly-refused-to-dismiss-vehicle-service-contract-case

CHARLESTON, W.Va. (WCHS) — West Virginia Sen. Jim Justice has been issued a garnishment summons to pay more than $3 million in debts owed to an Illinois-based creditor after the senator failed to repay a bond, court records show. The summons, issued on Jan. 28 by the United States District Court, Western District of Virginia, states that Justice owes $3,179,383.83 plus $101,369.69 in interests to Western Surety after he allegedly broke a contract with the insurance company. According to the initial filing from Western Surety from August 2024, the debt came after Justice’s Bluestone Resources Inc. and Southern Coal Corp. was ordered to pay more than $2.7 million, plus additional fees, following a judgment from May 2020 in the District Court of Dallas County Texas that ruled in favor of Texas-based financial service business First National Capital which claimed Bluestone breached an equipment lease contract. Following the ruling, Chicago-based Western Surety Company executed a supersedeas bond on behalf of Bluestone Resources Inc. worth more than $3 million to allow for Justice’s company to file an appeal. However, according to the attorney representing First National Capital, the appeals court affirmed the decision and dismissed Bluestone’s petition for review in 2023, thus requesting Western Surety to pay the bond penalty. Sen. Justice now has the option of making a based on the judgment, file a “written answer with the court” or appearing before the U.S. District Court in Harrisonburg, Virginia on March 28. The garnishment summons is the latest in the senator’s financial woes with reports from Forbes in January that estimates $1 billion in debts owed by Justice, as well as a decline in asset valuation. The former governor-turned-senator has faced several legal challenges regarding finances related to both his coal companies and the luxury resort, The Greenbrier, which is owned by the senator’s family. https://wchstv.com/news/local/court-issues-garnishment-summons-to-sen-jim-justice-for-3-million-in-debts

The insurance sector offers significant growth potential despite challenges like outdated underwriting, trust issues, and complex processes. Opportunities exist in areas such as vehicle underwriting, SMB insurance, and surety bonds, with innovation-driven startups poised to capitalise on these gaps. Moneycontrol Opinion February 18, 2025 / 11:15 IST BY Mayank Jain Problems with Medieval Vehicle-Only Underwriting Motor insurance in India continues to rely heavily on vehicle-only underwriting, where premiums are based solely on the type of vehicle and city. This means that two vehicle owners with the same car in a given city are charged identical premiums, ignoring customer-specific factors like driving behaviour, vehicle usage, demographics, or CIBIL scores. The reliance on vehicle-only underwriting stems from third-party distribution, where 95% of new car premiums are distributed by OEM brokers (dominating the 0-4-year car market) and individual agents (dominating the 4-8-year market). These third parties withhold personally identifiable information (PII) from insurance providers to avoid disintermediation during renewal, leaving insurers unable to customise premiums. This has created a scenario where good customer cohorts – such as those with prime CIBIL scores (750+) or middle-aged (35-50 years) customers – end up subsidising high-risk segments. Despite attempts by existing players to address the issue, the complication persists. This creates a clear opportunity for another D2C insurer to emerge, provided they can develop an economically viable direct go-to-market (GTM) strategy. Alarming Trust Deficit in SMB Insurance Our conversations with SMB owners across industries and revenue scales revealed a glaring trust deficit in insurance. Businesses with revenues between ₹10-250 crore report severe pain points, particularly for non-health products like fire, marine, liability, and engineering insurance. This segment views online insurance as a compliance-driven market, where the cheapest policies are purchased solely to meet counterparty or lender requirements. However, SMBs cite a clear unmet need for protection-focused policies. They struggle with unclear policy terms, complex documentation, and surprises at the time of claim, which often result in rejections or reduced payouts. In fact, many SMBs believe insurers lack the intent to honour claims and are designed to reject them. We see this as a greenfield market, with opportunities for startups to take a full-stack approach – owning underwriting, distribution, and claims – while targeting specific industries or supply chains. For insurance-tech startups targeting SMBs, the key will be identifying specific market segments to target and crafting an economically viable GTM strategy. Surety Bonds: Unlocking Capital for Infrastructure In infrastructure and construction, businesses are required to provide guarantees during projects, traditionally through bank guarantees. Bank guarantees require collateral, often in the form of fixed deposits, which ties up valuable liquidity. With high capital costs, freeing this collateral could bring significant economic benefits to these sectors. Surety bonds, which are an unsecured alternative to bank guarantees and are issued by insurers, help solve this problem. While the commission for surety bonds is higher, they free up working capital for businesses. Although widely adopted in the U.S., this market is nascent in India, with IRDAI introducing the framework only in 2022. Insurers are still exploring how to underwrite these products, and service providers and beneficiaries lack awareness. Startups can play a key role in enabling adoption by educating the market and building underwriting capabilities. However, the market’s limited size and the complexity of the product mean it remains an emerging opportunity that calls for cautious optimism. Thinking Ahead Beyond these opportunities, the insurance sector also grapples with several other problem statements that present scope for innovation. In healthcare insurance, delays in cashless approvals are driven by mistrust between hospitals and insurers, aggravated by a lack of standardised medical coding, which leads to manual inefficiencies. In microinsurance, categories like crop and trip insurance are held back by manual claims processes – there is no automated or parametric claims system in place, even though it is feasible. In life insurance, mis-selling by agents – who prioritise commissions over customer needs – results in poor policies with low coverage and high churn, with over 50% of policies lapsing within five years. Ultimately, at its core, the insurance industry is burdened by an outdated tech stack and resistance to change. Nevertheless, the sector offers massive opportunities for startups willing to tackle specific pain points. Success in this sector will depend on the founders’ ability to develop economically viable GTM strategies, build trust, and leverage technology to modernise underwriting, distribution, and claims processes. (Mayank Jain, Principal, Stellaris Venture Partners.) Views are personal, and do not represent the stand of this publication. https://www.moneycontrol.com/news/opinion/ripe-for-disruption-opportunities-and-challenges-in-the-evolving-insurance-sector-12943480.html