Credit Enhancement Bonding and Insurance
Credit Enhancement Bonding and Insurance is the utilization of, but not limited to:
- The combination of Insurance and Non Insurance risk transfers
- Contractual Risk Transfers
- Highly evolved Risk Mitigation Strategies
- Both Standard and Modified Bonding Solutions
- Advanced entity structuring (LLCs, Trusts – both simple and advanced, etc.)
- Captive Insurance Companies,
- Contractual Liability Policies (CLIPs)
- Even Charitable Foundations in select circumstances
Custom Enhancement Bonding Insurance Program
Since its inception, BRG’s Credit Enhancement Bonding and Insurance programs have received acclaim and admiration from many in various financial arenas. Some such accolades have begun to go as far as to refer to BRG’s Credit Enhancement Bonding and Insurance program as an “Insurance Wrap”. Our Credit Enhancement Bonding and Insurance program is not an Insurance Wrap but instead utilizes Insurance, Bonding, Contractual Risk Transfer and many other Risk Management and Risk Mitigation principles and mechanisms to create custom client programs that when accurately followed can reduce, if not eliminate, the risk of client default to a project lender for financier.
BRG’s Proprietary Credit Enhancement Bonding and Insurance structure is a virtual Godsend to those individuals and organizations that possess wonderful projects which are simply having trouble finding and/or nudging along the appropriate Partner, Joint Venture, or Traditional Source of Lending. Through the utilization of our program, substantial amounts of risk facing the client’s project can be reduced and/or eliminated while reducing overall costs at the same moment.
Credit Enhancement Bonding And Insurance - What It Is... And What It Is Not
- Insurance Wrap: There are multiple definitions for an “Insurance Wrap”, however the most commonly referred to definition when it comes to Credit Enhancement stems from the comparison to the use of the term when used to represent an Owner Controlled Insurance Program (OCIP), Contractor Controlled Insurance Program (CCIP), etc.
- To add even more complexity to misuse of the term “Insurance Wrap” is that OCIPs and CCIPs are commonly used as components of some of GDI’s Credit Enhancement Bonding and Insurance programs.
- Credit Insurance : Refers to the insuring of Accounts Receivable (A/Rs) against the risk of default by the party being billed.
- Although it does not constitute a Credit Enhancement program by itself, Credit Insurance can many times play an integral role in one of GDI’s robust Credit Enhancement Bonding and Insurance programs.
- Credit Enhancement: Refers to the products and services intended improve the credit rating and/or credit worthiness of an entity in order to obtain (1) more favorable financing terms, or (2) to eliminate or circumvent road blocks that may be barriers to enabling funding to occur. GDI Insurance Agency, Inc.’s work through the implementation of its proprietary Credit Enhancement Bonding and Insurance program has led some to refer to it as Credit Positioning; as it has proven to assist GDI clients in increasing the favorability of terms during Credit Placement. The concept of Credit Enhancement is not a new one; however GDI has seemed to experience considerable success via the expansion of the concept to be one that focuses on a holistic approach rather than the primarily fragmented designs of traditional Credit Enhancement products in the past. Through innovative proprietary products and structures, GDI has been able to provide its clients with considerable success from large scale projects ($1B+) to smaller projects ($5-10M+) and numerous projects in between. There are a few financial professionals that have voiced their initial criticisms of GDI Insurance Agency Inc.’s Credit Enhancement Bonding and Insurance programs due to their lack of understanding of GDI’s programs, which derive from the experiences many have had with others who have attempted to enter the Credit Enhancement arena in a halfhearted fashion. Once these finance professionals gain an understanding of GDI’s programs and philosophy, they quickly become fans rather than skeptics
Credit Enhancement Bonding And Insurance -- Why It Works When Other Fail
Many competitors in the industry and associated with Credit Enhancement tend to focus their sights on their “thin and deep” area of professional expertise rather than on the direction that is most beneficial for their client. This type of situation typically comes from a professional being comfortable in their discipline and then choosing to focus on solutions for the client that are primarily, if not fully, in their discipline. When we look at other insurance professionals that are dabbling in Credit Enhancement, we notice that they are merely peddling the same insurance policies they have for decades, without much consideration for the ever changing economic climate. It is BRG’s philosophy that as the economy and its industries/markets evolves, so must those that are trying to answer questions and correct problems/issues. Narrow mindedness does not provide robust enough problem solving for the complexities of today’s entrepreneurial projects. Time and time again, professionals at BRG find themselves realizing that the work they have to perform truly does not begin until the client’s Lender or Joint Venture Partner of choice says “No”. However, BRG does this work for each and every client regardless as to whether or not they are pursuing funding as it also increases the security of their interests in virtually every endeavor.
July 27, 2012
GDI Insurance Agency, Inc.
Attention:Grant Davis 801 Geer Road Turlock, CA 95380
Dear Grant,
GDI Insurance Agency, Inc. Attention: Grant Davis 801 Geer Road Turlock, CA 95380 Dear Grant, I would like to thank and recommend GDI Insurance Agency, Inc. and yourself to any client that has advanced risk management, financial placement, insurance, bonding, or credit enhancement needs.
When we met a little over a year ago I was working on two multi-billion dollar mixed-use developments in Dallas Texas. Getting them off the ground, pre-construction services, development team assembly, project phasing, market strategy, financing, etc… As the developers pursued several funding strategies, it became apparent that they needed to create a strategy to manage both short-term pre-development risks as well as long-term construction risks in both projects to attract equity and debt investors to their projects.
You broke down the projects to their core, identified all the risk associated with building and then running the projects once they were completed. Honestly I had never seen anyone more knowledgeable in risk identification than you were. You said, “if we do it right we protect both the owner and the investors equally.” Managing and removing the risk as you did, helped investors and owners as well as contractors all feel secure with their decisions to move forward.
After you identified all the risk, you put together solutions. One at a time you created risk mitigation solutions that removed or greatly reduced the risk of developing the projects. Even creating a funds control program that addressed concerns and provided executable solutions for the owners, investors as well as Clark as the general contractor.
In all my years I have never met anyone that has a better grasp of contractual transfers, risk mitigations, Osha compliance, finance and just plain determination to do it right. Adding protection for everyone involved, while at the same time saving the developments 10’s of millions dollars.
I would recommend to any business, no matter the size, that they retain GDI as their insurance broker. Further, I would encourage anyone with a difficult insurance or risk mitigation problem to engage you and your firm. Frankly, GDI cares more, knows more and works harder than any other broker I have met.
Clark Construction Group, LLC
7500 Old Georgetown Road Bethesda, Maryland 20814-6133
Phone 301/272-8100 Fax 301/272-1928 www.clarkconstruction.com
A Partial List Of Just A Few Of The Projects We Have Worked With Using BRG’s Proprietary Credit Enhancement Bonding and Insurance Program.
- Mixed Use Development: BRG’s proprietary risk management platform, credit enhancement bonding and insurance combined with BRG’s Funds Control Program, was used as the foundation of the debt and equity structure to eliminate the need for a standby letter of credit. The platform was later used to locate and negotiate funding from an entirely different source under much more favorable terms than those that BRG was originally approached to assist with.
- Mixed Use Development: BRG’s proprietary Risk Management platform was used to fortify the foundation of the business plan in order to obtain funding.
- Pigment Manufacturing Plant – New York: BRG’s Credit Enhancement and Bonding program helped this project gain it funding to acquire the manufacturing plant, buy and install all the equipment, get up and running and insured the take-off agreement..
- Client Letters of Recommendation: Here are two letters of recommendations to BRG's Insurance agency partner, GDI Insurance, regarding a credit enhancement structure that BRG designed with GDI for the clients. The first is from Clark Construction Companies Senior Director of development and the second is from the CEO of White Rock Pigments.
