When selecting a bonding agent, it’s essential to find someone who is the right fit for your business from the start. A solid bonding relationship can have a significant impact on securing the bonds you need and give you peace of mind in running your business. To ensure you’re working with the best bonding agent for your company, consider asking these critical questions:
1. Do they proactively monitor the factors that impact your bond program limits?
Understanding the financial metrics and contractual risks that are impacting your bond program is key. Find out if they primarily focus on bonds as an agent, or only occasionally as needed. An agent focused on bonding programs for the construction industry can provide guidance on growing your bonding capacity, provide perspective on bond rates, and provide superior service.
2. Do they understand the industry?
Understanding individual bond carrier appetites related to your specific trade/geography/business plan along with their capacity to grow your bond program as your company grows is of great importance. Working with an agency that specializes in construction can also provide a wealth of industry expertise just from within their agency including safety consulting, property & casualty insurance and employee benefits tailored to your company.
3. Do they work with your best interest in mind?
An agent’s compensation structure can impact the service they provide. Agents who work solely on commission may be more inclined to sell products that aren’t necessarily the best fit for your business. Look for a bonding agent who strives not only to understand what is best for your business today but also how to support your long-term strategic plan for the future.
4. Can they advocate for your business with surety markets?
Your bonding agent should be an advocate for your business, not just a middleman. They should know the right questions to ask and how to best present your company to their established surety carrier relationships. A knowledgeable agent will help ensure your company is presented in a professional manner in every interaction. Their detailed submission on your behalf and negotiation with each bond underwriter based on their experience in the industry will increase your chances of obtaining the bonds you need.
5. What other services can they offer to assist you as you grow your company?
Whether you are focused on organic growth, planning for an ownership transition in the future, or evaluating potential acquisition targets – selecting a bonding agent that utilizes an internal team approach can provide a fresh perspective. Financial benchmarking, internal underwriting analysis, sub prequal insights and contract review are just a few of the areas where a bonding agency team can provide significant additional value to your company.
Trust and confidence are key
By asking these questions, you can determine whether your current or prospective bonding agent is the right fit for your business. Having an agent that is focused on advocating for you and diligently working to understand where you want to go will provide you the confidence to seamlessly execute on your company growth strategy.