The Relationship between You, Your Agent and Your Surety

This put up is a part of a collection sponsored by Outdated Republic Surety.

Business purchasers who’re new to surety generally need assistance to grasp the three-way relationship between their firm, you (as their unbiased agent or dealer) and the surety firm. Right here’s data that may assist. We encourage you to share it along with your surety purchasers.

It doesn’t matter what enterprise you’re in, chances are you’ll want a surety bond sooner or later in time. This might vary from a easy enterprise providers bond to a multi-million-dollar efficiency bond. In both case, the connection you identify along with your surety agent and your surety bond supplier is essential.

The Nationwide Affiliation of Surety Bond Producers (NASBP) confirms that an organization’s bond producer (dealer or agent) performs a requisite function in a agency’s progress and success, significantly within the development trade.

Whether or not working with a small native company, a nationwide dealer, a specialist or a generalist, one measurement doesn’t match all and there’s no proper or flawed reply. One of the best match usually comes right down to who understands your online business goals and exposures — and finally, who do you belief to have your finest curiosity in thoughts? That is additionally the case in choosing a surety supplier. All events within the bond relationship have expectations, however belief and experience are its key elements. What different elements contribute to a robust relationship?

Open Communication

There’s a saying inside the surety trade, primarily related to contract accounts, that emphasizes the three “C”s of underwriting: character, capability and capital. We might add yet another “C” and that’s communication.

It’s necessary so that you can acknowledge that the surety is a co-signer to your bonded contractual obligations — and due to this fact the surety should have full and correct data.

Make a dedication to speak commonly and transparently along with your surety agent and surety bond supplier. For instance, contractors ought to present common updates on monetary data equivalent to projected outcomes, in addition to updates on tasks, whether or not they’re constructive or unfavorable. That dedication will at all times bolster your organization’s relationship along with your agent and bond supplier.

A agency’s surety agent also needs to concentrate on important modifications within the government group or administration roles or maybe even future acquisitions, expansions or relocations; all may play a big half in future surety requests.

Enterprise and Technical Experience

The appropriate surety agent understands the small print and processes concerned in bond necessities and bond underwriting, which additionally helps decide which surety firm will be the proper companion for your online business and its bonding wants.

Devoted surety brokers usually have in depth experience in a particular trade, from both an operations or underwriting standpoint. For instance, many surety brokers who focus on construction-related bonds have demonstrated experience within the development trade, together with a background in analyzing development trade monetary statements. This background is crucial when they’re consulting with the contractor to organize for the surety underwriting course of.

Companies in different industries, equivalent to engineering, vitality, healthcare, or numerous enterprise providers, additionally profit from working with a surety agent who understands their particular enterprise operations and the kind of danger exposures related to their industries.

Threat Administration Position

A surety agent and surety supplier can usually improve a consumer’s danger administration plan or program. They’ll play key roles in your firm’s exterior enterprise advisory group, alongside along with your CPA, authorized illustration and different insurance coverage professionals.

As a part of that group, they are going to coordinate to assist in the analysis of your organization’s insurance coverage wants and contract obligations, equivalent to normal legal responsibility, staff’ compensation, subcontractor danger administration, contractor’s legal responsibility, or inland marine. They might allow you to to establish and rectify gaps in insurance coverage protection. For instance, an organization that’s required to have an ERISA bond in place may want fiduciary legal responsibility insurance coverage or cyber legal responsibility protection. In abstract, they can assist you relaxation straightforward, understanding that your online business is sufficiently lined in case of a loss.

Lengthy-Time period Surety Relationship and Development

If your organization’s progress is tied to its bond capability — no matter your trade — a collaborative and proactive relationship between your online business, your surety agent and your surety supplier will allow you to meet your long-term operational and monetary targets.

Your surety supplier and agent need a robust relationship with you. Why? If you’re profitable, they’re profitable. They’re keen to assist along with your long-term enterprise and danger administration technique.

When you have any questions on something concerning surety, attain out to the Outdated Republic Surety department nearest you.

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