SURETY 101 changing business plans and bonding needs.
CHARACTER Last but definitely not least, the character of the shareholders and leadership team of a construction company is a critical component of a contractor’ s bondability. What surety companies emphasise most often is the contractor’ s reputation for honesty, integrity, fair dealings, and doing what it says it will do during both good times and bad.
Trust and transparency is what the surety companies and underwriters look for when building a meaningful relationship with the contractor. The surety companies have to trust that the contractor is providing the correct financial, project, and continuity information.
A contractor can have sufficient capital and capacity, but without high ethical and moral standards, this will only lead to one thing in the long run, and that is losses.
For many years, most surety companies had a cardinal rule of not bonding accounts without conducting face-to-face meetings. The surety companies now often rely on the brokers to pre-qualify potential clients. Hence, the broker’ s ability to discover any inconsistencies during the submission process plays a critical role in separating good honest clients from poor dishonest clients.
In summary, having an understanding of the 3 C’ s of surety underwriting gives you the tools to solidify the submission package to the surety. It also highlights the contractor’ s strengths as an operator beyond the numbers on its balance sheet and income statement. Providing insights into the shareholders and people behind the contractor is what will make the good clients stand out from the rest in the eyes of the surety. Above all, the underwriter will definitely appreciate the quality of the submission and will identify it as a tremendous value-added proposition. Knowing what to look for and asking the right questions will ultimately lay the foundation for a healthy working relationship between the contractor, the surety, and the broker.
Here at Jones DesLauriers Insurance Management, Inc., we want to help you through the process of setting up a bonding facility from start to finish. Our strong relationships with all the major surety markets nationwide means you can benefit from some of the best programs currently available for contractors. Feel free to reach out to our Bonding Department to learn more. +
BY: ANTONY YANG, SURETY DIRECTOR, JONES DESLAURIERS INSURANCE
Prior to joining Jones DesLauriers Insurance Management, Inc., Antony Yang was a senior underwriter at one of the largest surety companies in Canada. He uses a dedicated and comprehensive approach to apply his knowledge and experience of construction surety bonding. Antony currently holds Canadian Risk Management( CRM) and Associateship in Canadian Surety Bonding( ACSB) designations.
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