There are types of professional relationships that are best when long term, like with doctors, brokers, or insurance agents, and your relationship with a surety agent is no different. To establish a relationship with a surety specialist requires work on both sides if it’s going to be mutually beneficial and long-lasting, which we detail below.
The Importance of a Good Business Relationship with a Surety Agent
The process of getting set up with a surety bond line of credit requires detailed information, from personal financial information, to company financials and how your business functions, to past experience and future goals. It would be very difficult and tedious to have to work with a new surety agent every time you need a bond. Having a good relationship with a surety agent allows for skipping the getting to know each other information exchange every time you need a bond, and creates a more streamlined process that you don’t need to worry about when a bond need pops up. This doesn’t mean you won’t be required to provide updates periodically, but it allows for more long-term planning and strategizing to make sure your bond program supports your evolving needs.
Imagine going to a new doctor for every health check-up. You’d have to review your medical history at every visit, the doctor would have to learn how best to help you, and you would have to feel comfortable and trust in the new doctor without having any sense for who they are. Much like your health, the health of your business is personal and is best helped when you have established and worked to develop a relationship with a trusted advisor or partner.
The relationship you have with a surety agent is much like the sort you’d have with your doctor or a right-hand man at your company.
4 Things a Contractor Should Do
for Building a Good Surety Relationship
The key to building a good relationship with a surety agent is primarily honest communication, but that can be expanded into more detail with the following 4 keys to establishing a quality business relationship.
Communication is key in most kinds of relationships, but misunderstandings in business can be disastrous. There is information a surety agent must have and omissions can spell mishap. When an agent asks you about something about a past project you completed or has a question about your financial history, even if you think the answer will paint the wrong picture, it is not the time to misrepresent reality or leave anything out. An omitted detail can cost you a bond or possibly end the relationship.
The other aspect of communicating openly is being able to discuss your goals for the business, such as wanting to grow it or stay the size it is now. That way, your surety agent can help you plan for this by making sure your bond capacity is in line with your goals.
Provide Both Financial and Job Cost Information for Ongoing Work
It’s easy to see why a contractor would focus on their backlog and future planning inwardly, without seeing a need to loop their agent in on how or where things are going. However, keeping your surety agent apprised on your operations is beneficial for a few reasons. For one, there are numerous hiccups that a surety agent can provide guidance on, such as a dispute with an owner or a problem subcontractor creating a hold-up on your job. They especially need to be kept informed of cash flow problems, if suppliers are at risk of not getting paid and falling behind on a project, so they can work with you to find a solution before hearing about the problem after it’s already too late.
Provide Timely and Correct Information
Providing timely and correct information goes hand in hand with communicating openly. The bonding process can be time-sensitive and in order to best help you, your agent will need you to help them help you. When your surety agent needs information, whether it’s questions regarding an upcoming bid or financial information, get it timely and do your best to make sure it’s correct. If you’re unable to for some reason, communicate that to your agent so they can understand that situation and figure out a plan B. You don’t want to miss out on the perfect job simply because you weren’t able to secure the bond in time, nor does a good surety agent want you to miss out on it either.
Be Willing to Listen and Be Open to Guidance From the Surety Agent
Would you argue with your attorney or your doctor? Although debate can be productive, generally you follow their advice and hear what they have to say. After all, they’re the specialist and you’ve gone to see them for their expertise. The same goes for a surety agent. You’re working with them because they have the experience and knowledge you don’t regarding surety bonds. One of the best tips for a good relationship with your surety is to not let ego get in the way, or be offended by questions they ask. Remember, when you succeed, they succeed as well, so the questions are coming from a place of wanting to help and wanting to secure the bond, or bond program, you need.
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How to Harm the Relationship with a Surety Specialist
The greatest way to harm your relationship with a surety agent is by working with multiple surety agents at the same time. While there is nothing wrong with shopping around when looking for a surety expert initially, once that relationship has been solidified you should stick with them. If you’re shopping for a surety agent, here is a handy list of questions to help you in your search for a quality surety expert: https://commercialsurety.com/the-top-6-questions-you-need-to-ask-your-surety-agency/
A surety relationship requires trust and another way to destroy it is by providing inaccurate financial information. Of course, there is a difference between making an honest mistake and intentionally omitting information or providing fraudulent information, but either way, it is harmful. Remember, getting a bond is heavily based on financial documentation and if you gain the reputation of falsifying that information it is unlikely anyone will issue you a bond or work with you to get one.
Mutually Beneficial Relationship with a Bond Professional
Any professional relationship is successful when it is mutually beneficial to each party and that’s what we strive for at CSBA. We work with contractors who value our business relationship, specialized skills, and input so that together we can continue building California.
If you’re interested in a long-term business relationship with a surety agent that is committed to your success, don’t hesitate to reach out to us. We’d be proud to work with you.
Get a Surety Bond quote now
We want to know more about how we can help your construction company get the right Surety Bond for your next project.