As an integral part of the contractor/client's management team, the surety agent provides professional advice on strategy that will maintain the surety credit needed to support sound management objectives. A contractor can look for a number of things in determining whether a particular agent is a surety professional qualified to handle his/her surety needs. They are:

  • An understanding of the construction industry and the construction management process, including estimating, bidding, building and cost control systems
  • Knowledge of construction, subcontracts and contract law
  • An awareness of local, regional and national construction markets
  • An understanding of basic credit principles
  • Familiarity with accounting and finance, with particular emphasis on the American Institute of Certified Public Accountants (AICPA) Audit Guide for Construction Accounting
  • An ability to analyze financial statements, work-on-hand schedules and cash flow
  • Experience in strategic planning and management practices that promote successful contracting
  • Active involvement in construction industry associations
  • Knowledge of the surety market, the surety credit process, and underwriting standards
  • The respect and confidence of surety underwriters
  • A reputation for integrity


Contractors can identify most of these characteristics in a surety producer by posing a few pertinent questions. After the initial screening, the contractor might want to have his/her financial officer, banker, CPA and attorney interview the agent for their evaluation of the agent's knowledge of contracts, finance and credit.

The professional surety agent should be willing to furnish references, including the names and phone numbers of existing clients, all surety companies represented in the last five years and accountants and bankers with whom the agent has professional relationships.

When the surety agent's professional qualifications have been established, contractor and agent should work closely to develop the agent's complete knowledge and understanding of the contractor's business and his/her goals, plans and aspirations. In this, the contractor must be willing to accept the agent into complete trust and confidence. Any withheld information limits the agent's ability to service the contractor.

Contractors should not change sureties without serious and thorough consideration. Building a surety relationship takes time; once established, that relationship should not be discarded lightly. Surety problems can be a result of failure in communication, for which the surety agent must bear some responsibility. If it is determined that irreconcilable differences with the present surety do exist or that it lacks the capacity to handle the contractor's business, then the surety market should be approached strategically. This means selecting a surety company with the ability to understand the unique characteristics of the contractor's business and the resource and flexibility to respond to his/her particular needs.

All too often contractors let the surety agent serve as their surrogate in all dealings with the surety company. They rely exclusively on the agent's relationship and credibility with the underwriters and never fully develop a relationship of their own with the people who make important credit decisions affecting their business. The conscientious surety agent will insist that the contractor be actively involved in all aspects of the surety credit process.

The agent's goal should be to create and maintain a strong bond between the contractor client and the surety underwriter. One important measure of the surety agent's service is the extent to which this goal is achieved. In the final analysis, unsecured credit is founded on one party's faith in another; it can exist only when both parties know, understand and trust each other. The role of the surety agent, expressed in its simplest terms, is to support and promote this relationship.