It’s easy to think that any surety agent will do the trick when your business needs a bond, but you’d be missing out on a lot of opportunities for help and to improve your company. Surety agents have a set of skills and professional expertise that applies to more than surety bonds. In fact, the right surety agent can help grow your business as part of a bonding strategy.
Let’s discuss how the right surety agent helps.
The Right Surety Agent vs. A Poor Surety Choice
Like any professional area, you have better choices than others and surety agents are no different. You’ll want to focus on the right surety bond agents that have the tools and know-how to help expand your company, enrich your knowledge, and get you the bond you need in the process. The first sign that the agent you’re talking with is the right one for you is choosing an agent that understands what surety bonding companies require from a contractor. Many insurance agents that dabble in bonds simply request a checklist of information from contractors without really understanding what surety companies look for when underwriting. Expert surety agents, on the other hand, have trained underwriters on staff and know exactly what the surety will look for and how to best present the information on the contractor’s behalf.
Another indication the agent you’re talking with for a bond would help grow your business is an in-depth understanding of construction financial statements and work-in-progress schedules, as well as being well-versed in the best practices of construction. Not only does this knowledge help the contractor better prepare for the bonding process, but following suggestions from the agent can improve your company and direct it towards growth.
A benefit of working with a surety agent over other professionals who can issue bonds is the understanding of the market. Remember that surety agents are experts in surety bonds while other professionals aren’t fully dedicated to the construction industry. The right surety agent will understand market trends for the surety industry that include new programs available to contractors, new sureties in the marketplace, and whether or not surety bond companies are becoming more strict with their underwriting. Knowing the market trends in the construction industry is a great help in navigating the bonding landscape and further helps you by knowing bad project owners or general contractors to work for, as well as:
- Difficult contract clauses or bond forms that create unreasonable liability
- projects being bid or currently underway and their status
- Subcontractors and suppliers to stay away from
- The overall competition for contractors
- Trends with profit margins
The right surety expert will pay attention to all these things as it’ll make getting a bond for their client all the easier. Armed with their professional knowledge, the right surety agent is a fountain of information to improve your company.
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What to Look for In a Surety Agent
When looking for the right surety agent, there are a few things you can look for in your hunt and ask when interviewing the agent:
- How much of their business is dedicated to surety bonds? If they’re an expert, it should be more than 75%.
- How many sureties does the agent represent? If it’s less than 20 companies, they won’t have the market access that a true specialist would.
- How much of their business is working with contractors? If they say less than 90%, they aren’t the right agent.
- Is the agent involved in any construction and/or surety industry associations? If they can’t name three or four, they aren’t well enough connected to help your company grow.
- Ask the agent to define quality customer service. If they don’t have a set of specific standards, then they aren’t the right surety agent to improve your business and are a bad sign for bonding altogether.
Never be afraid to ask an agent about their experience and points of view on things important to your business, and bonding needs. It’s how you find the right surety agent.
How Does a Surety Agent Help Beyond Bonding?
So, how does all this information apply to helping your company grow? Agents that specialize in surety bonds deal with numerous contractors and are well-versed in the best practices, as well as pitfalls, of the construction industry. They are able to guide a contractor towards building a more profitable business and grow their bonding capacity by ensuring all the correct pieces are in place. For more on how your bonding capacity relates to the financial health of your company, we strongly encourage you to read here: How Investing in Quality Internal Financials Can Increase Bonding Capacity
The right surety agent adds value to a contractor and acts as a consultant to help improve their business. Many small companies operate in a vacuum of information regarding best practices for specific trends in their industry, which makes it difficult to assess whether or not you’re reaching your potential or not. Surety specialists can help contractors gain that insight and perspective while guiding them to successfully implement them. These pieces of information the right surety agent has not only qualifies you for a greater bonding capacity, but it necessarily helps build a better contractor business.
Here is a further example of how your company‘s financials relate to your bonding capacity and how that ties into a stronger business: 3 Things Contractors Can Do to Increase Bond Capacity Immediately – CSBA
The Right Surety Help Goes Further Than Bonds
The right surety agent can help beyond bonds, the specialization of surety bonds for construction companies leads to the kind of expertise and relationships that helps build a contractor’s business further. We at CSBA have over 225 years of combined surety experience and 4 members of our team were underwriters for major surety companies, giving us the necessary insight to avoid the pitfalls and mishaps too common in bonding. Our surety agents have strong relationships with over 35 surety companies, several of which only work with a handful of surety agents in California. On top of that, we have a strong network of construction-focused CPAs, controllers, banks, and attorneys to help our clients build a solid team of professionals around them.
In short, we have the access and experience required to be called experts.
Meet the right surety agent at CSBA.
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