Legislation that amends the Public Construction Bond Act (30
ILCS 500/1) has been signed into law, effective 08/22/2014. Public Act 098-1018
adds language to the Public Construction Bond Act that requires a surety that
provides bonds to be licensed with the Department of Insurance and that the
company shall have a financial rating of a least A- as rated by A.M. Best
Company, Inc., Moody’s Investors Service, Standard & Poor’s Corporation, or
a similar rating agency. Prior to the enactment of this legislation,
there was no language in the Public Construction Bond Act regarding minimum
financial rating requirements, and CDB allowed a minimum financial rating of B.
CDB is revising the SDC (via the Supplement to the SDC) to
include this requirement. Bidders of construction projects should contact
their surety company to ensure that the minimum financial rating of A- is
met. Pending construction contract awards are subject to the signed
legislation and CDB is reviewing the financial rating of each surety that is
being used on those projects.
Architect/Engineers preparing bid documents for CDB should
be aware that the legislation causes an immediate revision to the Supplement to
the SDC that is included in the Division 1 of the Project Manual. Within
Division 1: 01 11 01 Supplement to the SDC, Section 00 73 17, Bonds,
General, .1 Requirements and .3 Acceptability have been revised.
Regarding requirements for insurance companies providing
general insurance such as Commercial Liability, Automobile and Workmen’s Compensation,
this legislation is not applicable, and therefore, the minimum financial rating
of B will not be changed.