Sage Advice

How to select a surety company and agent

A reputable surety can be a key partner in helping you manage your risk. A surety can also serve as a key company advisor, helping you to spot issues, improve processes, and overall build a stronger business. That’s why it’s so important to do your due diligence before selecting a surety as a business partner.

Several sources are available that rate sureties. The most popular is A.M. Best, a credit rating agency serving the insurance industry. Another useful source is the U.S. Department of the Treasury, which publishes an annual list of sureties that are qualified to write bonds. Often referred to as the “T” list, it tells you which states the surety is licensed to do business in and the surety’s underwriting limitations.

Most sureties distribute bonds through agents (also known as brokers or producers). A professional bond agent is your guide through the bonding process, helping you to select and build a relationship with a surety that best fits your needs. So it’s also important to select a surety agent that you can trust has your best interest in mind. Look for an agent who:

  • Has a reputation for integrity and quality service
  • Is experienced in the construction industry
  • Understands construction contracts, finance, strategic planning, and successful management practices
  • Has built solid relationships with respected surety underwriters>/li>
  • Is actively involved in local and national construction industry associations

Other resources to check into surety companies and agents are the U.S. Small Business Administration, Surety & Fidelity Association of America, and National Association of Surety Bond Producers. You can also read more about this topic in the Sage Job Ready Guide, “Reducing risk with surety bonding.”

Special thanks to Kelly Niemela of LaPorte & Associates for this informative blog series exploring the role of surety bonds in an effective risk management program.

Nexus: G-WEBCD4