A minority-owned insurance agency, designed to help minority building contractors across the nation obtain surety bonds, was established in Washington yesterday.
The new business, MCAP Bonding and Insurance Agency Inc., will have branch offices in Los Angeles and Atlanta and Agreements with several national insurance companies to underwrite bonds through the local agency.
MCAP Bonding is an affiliate of the Minority Contractors Assistance Project, a non-profit corporation established eight years ago to provide technical and financial assistance to minority builders.
Bonding is essential for contractors who participate in public construction projects and in most private building.
However, construction firms owned by blacks and other minorities have had difficulties in securing such bonding.
"Minority contractors consider surety bonding requirements to be one of the main obstacles to equitable participation in the construction industry," said Rep. Walter Fauntroy (D.D.C.) at a news conference yesterday, called to announce formation of the agency.
"The new agency represents a significant new resource for minority contractors and the insurance companies which have agreed to underwrite bonds through the agency are to be commended for doing so," he added.
Under agreements with the national insurance firms - including Aetna Casualty & Surety Co. Insurance Co. of North America and Fidelity & Deposit Co. of Maryland - MCAP Bonding and Insurance will underwrite bid, payment and performance bonds for minority contractors in all states.
Spokesmen also reported yesterday that the agency has underwritten a $400,000 performance bond for a minority contractor in Los Angeles, Borbon Inc., to paint a new Miller Brewing Co. plant.
Anigroeg Services Inc., of the District, also received more than $170,000 from painting contracts with government agencies, after securing a bonding policy.
Since the bonding agency is a subsidiary of a non-profit corporation, no revenues may be distributed as profits or dividends to any private individual or MCAP officer.
With some $2 million borrowed from five life insurance firms, MCAP has guaranteed more than $5 million of loans to more than 350 minority contractors in the past eight years, generating $35 million incontracts for minority firms.