“I work in one of the best industries that nobody has ever heard of. I help companies succeed, make sure projects get built, and protect taxpayers’ money.” - Mike Bond
What do you do at Work?
When my ten-year old daughter comes to work with me, she says “All you do all day is talk on the phone and type on the computer.” Well, she is not completely wrong. But how do I explain to a ten-year old what surety is and what I do? We all have the same problem at cocktail parties or meeting someone for the first time. How do we tell people how interesting and complex surety is, without making their eyes glaze over? (When I don’t really want to explain, I tell people I work in insurance. That usually makes them scuttle quickly away.)
We could say “Surety helps build America.” But in today’s environment, that seems a little too dogmatic and vaguely political. How about “Surety guarantees performance and payment by contractors?” Technically true, but that dryly captures only a part of what the industry does. We could say “Surety protects owners and taxpayers by guaranteeing that projects get delivered.” Getting warmer, but still doesn’t paint a complete picture.
How Surety Supported a Local Library
For my family, I have a tangible example of what surety does. In the town where I live, across from my daughter’s school, the county contracted for the construction of a new library. This is the library where my youngest would go every week to read and get books. The contractor demolished the old library and started building a new one. About six months into the job, the contractor went bankrupt. The project stalled. Nearly every day, my daughter would ask me “When is the new library going to open?” Unfortunately, the company I worked for at the time was the surety for the now defunct contractor. We stepped in, got the project back on track, and after paying a sizeable claim, delivered the completed library. The county was happy. The kids in the town had a nice new library. And I could tell my family “See that - my company helped build the library.”
The entire surety industry must do a better job of articulating the benefits of surety. I like the NASBP’s “Guaranteed to Succeed” campaign. Aimed at contractors, the NASBP is working to sell the advantages of surety. This takes the conversation from “You need surety” to a more positive “Surety helps you.” Over the years, I have sat across from contractors who have proudly said “My surety helped me out of a tight spot by financing me. And I paid them back.” Or “My surety broker and carrier have given me great advice on how to run my business and made my company better.” When you hear this, you know that the value of surety goes much deeper then claims payments.
Surety Beyond The Claims Payment
The industry does pay claims. According preliminary SFAA information, the surety industry paid more than $800 million in claims in the US in 2018. That $800 million in claims payments helped complete billions more in projects. With surety, claims paid only captures part of the story. It doesn’t capture where the surety steps in and finds a new contractor to complete the work. Or finances a contractor that got behind in his cash flow, allowing the company to finish the project. Or acting as a trusted third party to help resolve a dispute between the owner and contractor that threatened to derail a project. These are things that sureties do every day. And it is behind the scenes, often out of sight and not reflected in the claims numbers at all.
The SFAA has grappled for years on how to talk about claims and promote the value of surety. I believe the sureties are making progress. After years of discussion, there is recognition at the industry level we have to sell the value of surety. While we may rely on the Miller act to create demand, the surety industry must understand and communicate what value our customers and beneficiaries get from a surety bond. This will not only help us build stronger relationships with our traditional customers, it will allow us to grow the pie to expand to obligees who in the past resisted using surety bonds.
What Do You Do?
So the next time somebody asks you what you do, tell them proudly “I work in one of the best industries that nobody has ever heard of. I help companies succeed, make sure projects get built and protect taxpayers’ money.” Then tell them your surety story – the project that got turned around, that customer who you saved from failure, or the library you helped build. That could be the start of a long, but interesting conversation.
If you want to learn more about surety or if you are looking for a surety that really understands the value that surety brings, contact the Euler Hermes North America Surety Team:
|Mike Bond, Head of Surety
|Angelo Balestrieri, Regional Surety Manager
|Jed Loftis, Regional Surety Manager
|Maggie Weber, Regional Surety Manager
|Paul McIntyre, Vice President, Surety Canada
|John Stewart, Senior Surety Underwriter - Canada
|Rob Duke, Surety Legal Counsel