Prequalification Letter Template
What this is
The one-page letter your surety writes to an owner saying it supports you and roughly how much work it will bond. Owners ask for it when they are deciding who gets on a bid list.
The letter goes out on the surety's letterhead and is signed by your producer as attorney-in-fact — meaning they hold a power of attorney letting them sign for the surety. You do not write this letter yourself. You use this template to know exactly what should be in it, and to check the numbers and the addressee before it reaches an owner.
When you use it
- An owner or agency asks for "a letter from your bonding company" as part of prequalification
- You are getting on a bid list for the first time with a new owner
- A general contractor asks a subcontractor to demonstrate bonding capacity before award
- You need a generic "to whom it may concern" version for your prequalification package
- Your capacity has increased and your old letter understates you
How to fill it in
Decide generic or addressed before you ask. A generic letter is addressed "To whom it may concern" and can be reused. An addressed letter names the specific owner and sometimes the specific project. Many public agencies and most institutional owners require addressed. An addressed letter takes an extra day, so ask early.
Get the obligee's exact legal name. The obligee is the party protected by the bond — usually the project owner. "City of Fresno" and "City of Fresno Public Works Department" are not interchangeable to a clerk checking a submission against a bid package. Copy the name character for character from the bid documents.
Check the two capacity numbers against your letter of authority. Aggregate capacity is the total bonded work the surety will support at one time. Single project limit is the largest one job. Both come from your standing letter of authority, and if the letter stays inside those figures nobody has to call an underwriter — which is why it can turn around in hours.
Do not ask for a number larger than the owner needs. If the job is $4M, a letter citing a $5M single limit is fine. Asking your surety to state a $25M single limit "to look strong" invites a re-underwriting conversation you did not need to have, and if the surety declines, the owner may hear about it.
Years of relationship should be the real number. If your surety has supported you for eighteen months, the letter says so. A short relationship with a strong surety reads better than an inflated one that the owner cross-checks.
Check the state. The letter states the surety is an admitted surety insurer authorized to issue bonds in a specific state. If you are bidding out of state, that has to be the state where the job is, and the surety has to actually be admitted there.
Are they listed on the U.S. Treasury's Circular 570 (the list of companies acceptable as sureties on federal bonds), and at what underwriting limit? Federal and many state jobs will not accept a surety that is not on it.
Occasionally an owner demands the conditional language be removed, or asks for a letter that "guarantees" bonds will issue. No surety will do that. The fix is a conversation between your producer and the owner, not a different letter. See the notes below for why.
Merge variables
| Variable | What it is | Example |
|---|---|---|
{{DATE}} | Date the letter is issued | March 4, 2026 |
{{COMPANY_NAME}} | Your exact legal entity name, matching your license and contract | Vasquez Bros Construction, Inc. |
{{SURETY_NAME}} | The surety company's legal name, not the agency's | (surety company legal name) |
{{YEARS}} | How long the surety has supported your program | seven years |
{{AGGREGATE_CAPACITY}} | Total bonded work supported at one time | $30,000,000 |
{{SINGLE_PROJECT_LIMIT}} | Largest single project supported | $12,000,000 |
{{STATE}} | State where the surety is admitted and the work is located | California |
{{AM_BEST_RATING}} | The surety's A.M. Best financial strength rating | A (Excellent), Financial Size Category XV |
{{OBLIGEE_NAME}} | Exact legal name of the owner/agency, for an addressed letter | (leave blank for generic) |
{{OBLIGEE_ADDRESS}} | Owner's mailing address, for an addressed letter | (leave blank for generic) |
{{PROJECT_NAME}} | Specific project, if the owner requires it referenced (added) | (optional) |
{{PRODUCER_NAME}} | Person signing as attorney-in-fact (added) | (producer name) |
{{AGENCY_NAME}} | Producer's agency (added) | (agency name) |
{{TREASURY_LIMIT}} | Surety's Circular 570 underwriting limit, if cited (added) | (optional) |
For a generic letter, replace the {{OBLIGEE_NAME}} / {{OBLIGEE_ADDRESS}} block with
nothing and keep the "To whom it may concern" salutation.
The template
[SURETY COMPANY LETTERHEAD]
{{DATE}}
{{OBLIGEE_NAME}}
{{OBLIGEE_ADDRESS}}
Re: Prequalification for {{COMPANY_NAME}}
{{PROJECT_NAME}}
To whom it may concern:
{{COMPANY_NAME}} has asked us to provide you with information relating to our
experience and relationship with them as their surety.
{{SURETY_NAME}} has participated in the surety program of {{COMPANY_NAME}} for
the past {{YEARS}}. We have had a most favorable experience with
{{COMPANY_NAME}}, and developed a high regard for them as a surety customer. We
support {{COMPANY_NAME}} with a surety program with a total current bonding
capacity in excess of {{AGGREGATE_CAPACITY}}, and a single project bonding
capacity of approximately {{SINGLE_PROJECT_LIMIT}}.
We are prepared to consider providing the required bonds on their behalf. Our
support is conditioned upon and subject to the completion of our underwriting
process, including, but not limited to, our review of and satisfaction with the
underlying contract documents, bond forms and financing, and our determination
that the proposed bonding arrangement is acceptable to us.
This letter is not an assumption of liability or a commitment to issue bonds. It
is solely a contractor prequalification letter for {{COMPANY_NAME}}, which is
being furnished to you at its request. Any arrangement for bonds is strictly a
matter between {{COMPANY_NAME}} and {{SURETY_NAME}}.
{{SURETY_NAME}} is an admitted surety insurer authorized to issue bonds in the
State of {{STATE}}. {{SURETY_NAME}} is a U.S. Treasury listed surety with an
A.M. Best & Company credit rating of {{AM_BEST_RATING}}.
Sincerely,
{{SURETY_NAME}}
_______________________________
{{PRODUCER_NAME}}
Attorney-in-Fact
{{AGENCY_NAME}}
Optional additions (added)
Some owners ask for specifics the base letter does not carry. Ask your producer whether the surety will add any of these; most will, on request:
| Addition | Suggested wording |
|---|---|
| Treasury underwriting limit | "SURETY_NAME appears on U.S. Treasury Department Circular 570 with an underwriting limitation of TREASURY_LIMIT." |
| Project-specific support | "We are prepared to consider bonds for the referenced project in the amount of $__________." |
| Available capacity today | "Based on current backlog, available capacity is approximately $__________ as of DATE." |
| Length of relationship, with date | "We have supported COMPANY_NAME continuously since __________." |
| NAIC number | "SURETY_NAME, NAIC # __________." |
Keep a current generic letter on file at all times, refreshed whenever your capacity changes or your letter of authority renews. Request addressed letters project by project, with 48 hours of notice.
Notes and common mistakes
The conditional language cannot be removed, and you should not want it removed. Two paragraphs do the legal work in this letter:
- The support is "conditioned upon and subject to the completion of our underwriting process," including review of the contract documents, bond forms, and financing.
- The letter "is not an assumption of liability or a commitment to issue bonds."
Without those, the letter stops being a character reference and starts looking like a binding commitment to bond an unknown job on unknown terms. No surety will issue a letter without them, and an agency that offers to is not being helpful. The surety is telling the owner what it thinks of you today while reserving the right to read the actual contract before it signs a bond. Reproduce that language as written.
Sending a letter with stale numbers. A letter citing last year's capacity, issued after your capacity went up, quietly caps you on a bid list. Refresh it when your letter of authority renews.
Entity name mismatch. The letter must name the same legal entity that will sign the contract and appear on the bond. If you bid through an affiliate or a joint venture, say so before the letter is drafted.
Using a prequalification letter where a bid bond was required. They are not interchangeable. A bid bond is a bond; this is a letter of opinion. If the bid package says bid security, you need the bid bond.
Assuming it is enough. Larger owners increasingly run their own prequalification process with their own form. The letter goes in the package; it does not replace it. See prequalification letters for the wider process, and bonding capacity for where the numbers come from.