Bond Agent Secrets: Make Surety Your Secret Weapon!

And Stephen, in my experience, the best contractors seem to have a great relationship with their bond agents and the surety companies, not just call me when you need me type of relationship.

Yeah, that's so true, Wade.

Just to explain to our listeners, surety company is making a financial decision whether to back the project you're going to do.

Are you going to finish that job? Are you going to pay all your bills and liens? What about the workmanship? What about the warranty behind the workmanship? You might think to yourself, I know what I'm doing.

I've got a good business model.

I'm not going to take on a risk that I don't need to take.

So surety to me is just a necessary evil.

I remember a very large asphalt paving contractor couldn't stand surety or a relationship with him.

or even having to spend any time with them.

And I don't know why that was.

I think it was just a certain amount of arrogance of, I don't need you.

Surety bonds are required.

So I'd say to our listeners, don't think of it as just a necessary evil that you've got to deal with.

But think about it as when you're getting surety bonds and you have a good relationship with a good surety agent and a good surety company, then your business is going to grow and prosper because the two go hand in hand.

Yeah, I see it all the time too.

Like I said, always with your bond agent, they are a great source of information, but I've also seen it where they bring the underwriters out and introduce them and explain to them.

I know these insurance companies, the surety companies have a lot more resources that a lot of the contractors are not taking advantage of.

And I think they really want to help the contractors.

Obviously that insurance company would figure like we're going to expect a loss, but the surety companies hate losses and they don't want you to have a loss.

You have a loss and you lose a customer and as a contractor, you're out of business and you can have claims.

There's a difference between the claims and a loss.

Claims can occur and a good surety company keeps claims from becoming a loss, but also so does a good contractor and a relationship with the bonding agent that keeps it from even getting to the claims department and the beginning.

A lot of our listeners are going to see payment claims pop up.

They're going to have some material vendor or supplier that they didn't even do what they're supposed to do, yet they've got a credit manager that they blame it on and the credit manager files a payment claim.

So you've got these necessary evils to deal with in bond claims.