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Knight Specialty Insurance provides $175 million surety bond for Trump


Knight Specialty Insurance Co., the Delaware-domiciled excess and surplus lines unit of Knight Insurance Group, provided the $175 million surety bond posted Monday by Donald Trump in his New York civil fraud case.  

Knight Insurance is part of the Hankey Group of Cos., a Los Angeles-based financial services group.

Donald Hankey, chairman, confirmed to Business Insurance Tuesday that Knight Specialty provided the bond to Mr. Trump.

“It was an opportunity to step in and make a little bit of money and take very little risk, so we’re happy with the transaction and happy we could help” the former president, Mr. Hankey said.

Collateral was first submitted in the form of “grade-A investment-grade bonds” and then put in all-cash, he said, adding that the company was satisfied with the collateral.

The bond guarantees that if Mr. Trump loses his appeal and fails to pay, the bond will cover a portion of the judgment.

The bond prevents New York Attorney General Letitia James from seizing Mr. Trump's assets, including properties such as 40 Wall Street in Manhattan, Trump Tower, his Mar-a-Lago estate in Florida and various golf courses, according to news reports.

Mr. Trump originally needed to post a bond for $454 million, but a state appeals court on March 25 stayed enforcement of Justice Arthur Engoron’s judgment on condition that Mr. Trump post the smaller $175 million bond within 10 days.

Attorneys for Mr. Trump had argued that he lacked the cash to secure a bond for the full judgment after being rejected by more than 50 bond companies.

On Feb. 16, Justice Engoron found Mr. Trump had engaged in fraud by overstating his net worth by billions of dollars to secure better loan and insurance terms. Mr. Trump has denied wrongdoing in the case.

Knight Specialty writes various coverages in addition to surety bonds, including casualty, commercial auto, general liability, inland marine, homeowners and private passenger auto, and has a financial strength rating of A- from A.M. Best Co.

In 2022, Best described the Knight companies’ balance sheet strength as “very strong.”

Separately, Chubb Ltd. Chairman and CEO Evan Greenberg recently wrote to Chubb customers to explain the company’s decision to issue a surety bond for Mr. Trump guaranteeing the $83.3 million verdict in the defamation case brought by writer E. Jean Carroll against the former president.

The letter was issued after Chubb came under scrutiny following the disclosure that it had provided the means to allow Mr. Trump to meet a deadline to post a bond while he appealed that judgment.

Chubb declined to issue the larger appeal bond in the civil fraud case, according to news reports.