The Independent Agent’s Role in the Surety ‘Trust Triangle’

This submit is a part of a collection sponsored by Previous Republic Surety.

Massive surety accounts aren’t dealt with as mere transactions. They require a relationship primarily based on mutual belief through which the unbiased agent performs a crucial function.

Any definition of surety will record the three signing events in a contract surety relationship: the principal (or contractor), the obligee (or proprietor of the venture) and the surety. However typically ignored is the trio of surety gamers who work collectively for mutual profit: the surety, the principal and an unbiased agent.

Steve Hanson, just lately retired unbiased surety agent, Eugene, Oregon, describes that three-way surety relationship as a “belief triangle.” He observes that the “belief derived from shared expertise and evolving (over time) mutual respect, each skilled and private,” is a very powerful constructing block of a enterprise relationship. That’s very true for big surety contract accounts as a result of they aren’t dealt with transactionally.

In fulfilling their roles within the belief triangle, Hanson explains that surety producers and underwriters “acknowledge what the opposite wants with the intention to correctly and successfully do our jobs and roles” in supplying surety for the contractor. “We every attempt to offer the knowledge and instruments that allow each other to meet our duties whereas working successfully towards mutual targets in good religion with each other.”

Because the spine of any contract venture, every of the three should take into account the circumstances and greatest pursuits of the opposite two — all whereas serving one of the best pursuits of the venture proprietor/obligee. They set up mutual belief and understanding by way of private visits, venture website visits, and attendance on the agent’s and the contractor’s affiliation occasions, amongst different studying alternatives.

Inexperienced surety underwriters typically don’t absolutely perceive the function of the unbiased surety agent within the “belief triangle.” As my longtime pal and mentor, Hanson demonstrated that priceless producers serve a number of roles. First, the agent acts as advisor and facilitator for the principal. Second, the agent features as a matchmaker, connecting a contractor/principal with probably the most acceptable surety firm and underwriter. The agent additionally helps promote the contractor’s marketing strategy and its potential to the surety firm.

Mike Gale of the Buckner Firm in Ogden, Utah ― one other longtime pal and surety accomplice ― provides this sensible illustration of the agent’s worth within the surety relationship: “The surety particular person would possibly know all there may be to find out about surety, but when she or he doesn’t know the market the agent resides in, it’s tough to construct a relationship that advantages the surety, agent and shopper.” The underwriter have to be respectful and receptive to studying concerning the agent and contractor and to studying from them ― anticipating that respect and receptiveness to be reciprocated.

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