Reading a surety's prequalification questionnaire

The company and its owners

Legal name, entity type, years in business, ownership shares, related companies.

Why they ask: the surety will usually want the company and its owners, often with spouses, to sign an indemnity agreement. Ownership tells it whose signatures it needs. Related companies matter because money can move between them. The bonding capacity guide explains indemnity.

Answer well: match the names and percentages exactly to your formation documents and tax returns. A mismatch is a question you will have to answer later.

Key people

Resumes for the owners, project managers, estimators and superintendents.

Why they ask: capacity is people. An underwriter wants to know who will estimate and run the job, and what work of this size they have run before.

Answer well: show the size and type of jobs each person ran, not just their years. Name who takes over if a key person leaves.

Work history

Usually two lists: the largest jobs completed, and every job completed in the last few years, with owner, architect, contract amount and gross profit.

Why they ask: the largest completed job is the anchor for the largest job the surety will bond now. Gross profit on completed jobs, against what was bid, shows whether your estimates hold.

Answer well: list real references who will pick up the phone. If a job lost money, say why and what changed. The underwriter will often find out anyway.

Work on hand: the WIP schedule

For each open job: contract amount with signed changes, estimated total cost, cost to date, billed to date, and the gross profit expected.

Why they ask: this is where trouble shows first. A job that is underbilled can be a job losing money that has not been admitted yet. The total uncompleted work is what counts against your aggregate limit.

Check it ties to your books. An invented WIP at year end:

Percent complete by cost to cost, then earned revenue, then billed minus earned:

• A: 350,000 / 700,000 = 50%. Earned 800,000 x 0.50 = 400,000. Billed 420,000, so overbilled $20,000.
• B: 135,000 / 450,000 = 30%. Earned 500,000 x 0.30 = 150,000. Billed 140,000, so underbilled $10,000.
• C: 243,000 / 270,000 = 90%. Earned 300,000 x 0.90 = 270,000. Billed 280,000, so overbilled $10,000.

Totals: overbillings 20,000 + 10,000 = $30,000, a liability; underbillings $10,000, an asset. Those two figures should match the balance sheet lines for billings in excess and costs in excess at the same date. If they do not, the underwriter will ask why.

Gross profit to date: (400,000 - 350,000) + (150,000 - 135,000) + (270,000 - 243,000) = 50,000 + 15,000 + 27,000 = $92,000. Check by job: A expects 100,000 at 50%, B 50,000 at 30%, C 30,000 at 90%: 50,000 + 15,000 + 27,000 = 92,000.

Uncompleted work: contract total 1,600,000 less earned 820,000 = $780,000. Check by job: 400,000 + 350,000 + 30,000 = 780,000.

The free over and under billing calculator runs one job at a time if you want to check your rows.

Financial information

CPA-prepared year-end statements, interim statements, bank line of credit and its use, bank and supplier references.

Why they ask: working capital and net worth are the capital the surety leans on. The ratios they read first are worked in contractor financial ratios. The level of CPA work matters too; larger programs often ask for a review or an audit rather than a compilation.

Answer well: send statements that include the WIP schedule and notes. Explain unusual items before they are asked about, such as a large receivable from one owner or a loan to a shareholder.

Claims, disputes and continuity

Lawsuits, liens filed against you, jobs you did not finish, tax liens, and what happens if an owner dies or becomes disabled.

Why they ask: a surety pays claims, so it wants to know your history with them. Continuity matters because many small contractors are one person deep.

Answer well: disclose plainly. A dispute explained is far better than one discovered. A written succession plan or buy-sell agreement answers the continuity question.

After you send it

The producer presents the file, and the surety sets a single job limit and an aggregate limit. Each surety has its own method. The free bonding capacity estimator gives a rough figure from multiples you enter; only the surety sets real limits.

Where this sits for the exam

The bulletin lists subject areas only. Our reading puts bonds, financial statements and over and under billing under Procurement and Contracting Requirements, the largest area. Expect the terms and short arithmetic, such as percent complete, earned revenue and working capital.

Check yourself

Take the free check. It needs no signup and explains every answer, including the arithmetic. For the Procurement and Contracting lesson and practice questions with every step worked, see the plans.

Sources

• PSI Candidate Information Bulletin 1458, content outline, updated 7 Jul 2026. Retrieved 5 Nov 2026.
• All figures are invented and were worked twice. Questionnaires and underwriting methods differ by surety.

FAQ

Why does a surety want my personal information?

Sureties usually ask the owners, and often their spouses, to sign an indemnity agreement, so they look at personal finances too.

What does underbilling tell a surety?

It can mean revenue earned but not yet billed, or a cost overrun the estimate has not caught up with. Underwriters look closer at both.

Do I need audited financial statements to get bonded?

Not always. Smaller programs may accept a compilation or a review. Larger programs often ask for a review or an audit.