How do construction bonds work
Insuring megaprojects takes courage, reliability and a spirit of innovation
The Golden Gate Bridge in San Francisco will be 75 years old on May 27th / Allianz supported the construction of the bridge in the 1930s
On May 27, one of the most famous bridges in the world celebrates its 75th anniversary - the Golden Gate Bridge in San Francisco. Without Allianz, this icon of American architecture might never have been built.
In the 1930s, the construction of the Golden Gate Bridge was signed by a local insurer in San Francisco; this insurer still exists today - it's Fireman's Fund, a subsidiary of Allianz.
As can be read in Golden Gate Bridge: History of the World and People, the residents of the then new "Golden Gate Bridge and Highway District" voted on the construction on November 4, 1930; they provided their homes, farms, and businesses as collateral for a $ 35 million bond issue to fund the bridge. Fireman's Fund signed the building guarantee at an - for the time - horrific amount.
Without Allianz, this icon of American architecture might never have been built.
Opponents of the bridge considered the timing of the vote on the bond to be wrong - at that time not only America was stuck in the Great Depression - a bond-related debt would be economically irresponsible. Proponents saw the construction as an economic relief during the crisis. 145,697 of those entitled to vote were in favor of the building, only 47,005 were against. The fact that Fireman's Fund was willing to insure the building loan significantly increased confidence in the project.
"The Golden Gate Bridge was another project where Fireman's Fund has shown courage, innovation and reliability," said Lori Fouche, CEO of Fireman's Fund. It references a number of historical events in which Fireman's Fund has assisted its clients.
Today Fireman's Fund is an expert in specialized insurance solutions and a leader in high net worth, entertainment insurance and "green" insurance coverage. Fireman's Fund offers insurance products for private individuals and medium-sized companies that are supported by first-class claims and risk management solutions and supported by independent agents and brokers.
National and international mega-projects such as the insurance of bridges, skyscrapers, roads and highways, tunnels and offshore wind farms are now offered by Allianz Global Corporate & Specialty. AGCS operates worldwide and insures more than half of the Fortune 500 companies. The most recent projects included: the insurance and risk management for the Incheon Bridge in Korea (the construction of the 12 kilometer long bridge took five years), the Burj Khalifa skyscraper in Dubai (currently the tallest building in the world) and the Gotthard / Ceneri- Tunnel in Switzerland, which, at 57 kilometers, is to become the longest railway tunnel in the world.
The fact that Fireman's Fund was willing to insure the building loan significantly increased confidence in the project.
A selection of the historical events in which Fireman's Fund was involved:
- The Great Chicago Fire, 1871: Unlike many insurers who went bankrupt, Fireman's Fund made all damages even though losses exceeded assets. This proof of staying power allowed the company to build its reputation in America.
- Boston Fire, 1872: Just a year after the Great Chicago Fire, a conflagration devastated the city of Boston. Fireman's Fund again made all compensation payments.
- San Francisco Earthquake, 1906: Although the company's headquarters were completely destroyed, Fireman's Fund was able to meet all policyholders' claims through a combination of cash and stocks
- Charles Lindbergh's transatlantic flight, 1927: Fireman's Fund insured the construction of the "Spirit of St. Louis", with which Lindbergh flew non-stop from New York to Paris.
- The first sound films - in the late 20s: Fireman's Fund insured the film studios that wanted to cover the risk of the first sound film productions in the late 20s. Since then, the company has played an important role in drawing large film projects.
The insurer Fireman's Fund
Fireman's Fund Insurance Company, founded in 1863, is a leading property and casualty insurer offering private and corporate insurance solutions as well as world-class claims and risk management in the United States. Fireman's Fund is a leader in high net worth, entertainment and green insurance. Since 2004, Fireman's Fund has donated more than $ 29 million to fire stations in the United States. Fireman's Fund is part of the Allianz Group. More information is available at www.firemansfund.com.
As always, these statements are subject to our reservation of forward-looking statements, which are made available to you here.
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More information on the topic
San Francisco Bay Area Television Archive: Bay of Gold
AGCS: Worldwide solutions for engineering and construction insurance
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