There are many examples in the world where the combination of two elements becomes a greater whole than they would have been alone. Concrete alone has compressive strength. When rebar is placed in the pour, the tensile strength increases 300% up to 500%. Mahomes and Kelce become a Super Bowl ring. Iron and chromium/nickel become stainless steel. Fire and T-bone steak become delicious.
The Teamwork Effect
CSBA stimulates financial success in this teamwork effect with our clients. This is achieved through collaboration, consultation, and meaningful interaction.
The magnifying element CSBA brings to the mix is twofold:
1) keen awareness of the factors considered by the insurance company’s surety underwriter in determining a construction company’s bondability and
2) the ability (developed over decades) to proactively communicate the surety’s requirements and help you put the necessary pieces in place using our unique resources.
When asked, “What does it take to get a good bond line?”, an underwriter might simply respond, “We’re looking for well-managed companies.” OK, sounds good, but what does that mean? How do you define “well-managed”? You certainly already have some degree of management capability. The tricky part is presenting your capabilities to the underwriter while at the same time adapting the standards they recommend on your operation.
Bridging the Mindset Gap
The reason this is tricky is because the parties have different mindsets. Contractors are noted for being independent, resolute in their problem-solving capabilities, and comfortable accepting calculated risk. Surety underwriters operate off a body of knowledge and historical data that dates back to 1865. Though they do not have a crystal ball, they have a refined ability to recognize traits that ultimately lead to favorable results.
Our greatest success at CSBA occurs when we facilitate the blending of these two elements together. A good underwriter has respect and admiration for our mutual clients. At the same time, a forward-thinking construction business recognizes the wisdom offered by the surety and responds proactively. It is somewhat paradoxical that when we’re talking exclusively to you, we’re representing the surety. And when we’re talking to the underwriter, we’re representing your construction company. We celebrate the successful blending.
Defining "Well-Managed"
So, we’re back to that earlier sentence, “We look for well-managed contractors.” What does that mean? To answer that question, we have produced articles around understanding Financial Statement Basics, getting into the details of your workload with What is a Construction Work-In-Progress Schedule, The Importance of a Bank Line of Credit, and Risk Management and Relationship Development.
We look forward to helping you increase your bonding capacity and strategically build your business!
Conclusion
Founded in 1984, CSBA is now licensed in all 50 states. We specialize in all sizes of construction companies from emerging contractors, to mid-level businesses, to companies that collaborate with large national firms. Over the decades, we have established relationships with numerous construction-oriented accountants, lawyers, property and casualty insurance agents, and bankers. It pleases us to bring resources together to improve outcomes. So please don’t hesitate to reach out if you’d like to discuss this further.
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