This post is part of a series sponsored by IAT Insurance Group.
Whether you’re just starting out or looking to go mid-career, there’s a lot to be said for a career in insurance – but often less well-known are the opportunities in surety.
What is bail?
Although the bond is an insurance mechanism, it is not insurance. Surety bonds generally act as unsecured creditors who evaluate the creditworthiness of a business and/or individual when deciding whether to provide surety support in the form of a surety bond. The underwriting process often involves in-depth financial analysis of the financial statements of the company or individual requesting the bond, an examination of their overall business experience/business acumen and credit history among other areas of the underwriting process.
Surety bonds are almost always provided by insurance companies that have a dedicated group of underwriters and administrative professionals. Sekerheter generally conducts its operations with a focus on two areas – contract and commercial. Contract guarantors focus on the construction industry while commercial guarantors focus on all non-construction business and individual surety needs.
An important aspect of a contract surety underwriter’s job is working with construction companies that do bonding work and build everything from large facilities to roads, bridges and other critical infrastructure.
For example, when a construction project is binding, contractors are required to provide performance and payment bonds, usually in the amount of the construction contract. The bonds guarantee that the contractor meets their requirements in the construction contract and that all subcontractors and material suppliers who supplied labor or materials to a project are paid. If the contractor fails to do these things, the project owner can file a claim under the performance bond and if there are subcontractors or material suppliers who have not been paid, they can file a claim under the payment bond. Should the surety suffer a loss, the contractor in this example is responsible for full compensation to the surety company for its loss and costs.
So how can an underwriter demonstrate that their contractor is capable and support them with a bonded project that could cost millions of dollars? They review the bond request and contract and follow up by asking questions to gain a better understanding of the project and contractor. Sureties will also review the construction schedule, contract start date and how this date will be handled with existing contracts, warranties and payment terms – and more – all to better understand the risks of the project. On this point, the surety also has a strong view of the entrepreneur’s financial, organizational and experience-based ability.
In addition to construction, surety bondsmen evaluate a wide variety of industries that require surety bonds, including motor vehicle companies, the long-haul transportation industry, retailers, hospitality, residential and commercial developers, healthcare, financial institutions, and a variety of others.[1]
Security experts do it all
Essentially, a guarantor must be part accountant, part lawyer, part entrepreneur or business owner, part salesperson, and part business consultant for their clients.
With a surety bond, entities requiring the bond, also known as obliges, can minimize their risk. A surety bond serves as prequalification that the company or individual in need of the bond has the financial resources, experience and other attributes to fulfill the bound obligation.
The path to a career in bail
When it comes to career potential, surety has a lot to offer, including traditional insurance jobs such as underwriting, claims and distribution (agency/brokerage). There are also administrative and operational roles such as account managers, strategic initiatives and leadership positions.
For entry-level underwriting and claims roles, a bachelor’s degree in finance, accounting, risk management, construction management or law is preferred. However, if a mid-career professional does not have the preferred educational background but has years of experience in other industries such as banking, credit and financial analysis or construction management, they may also be a good fit.
Here are some skills common to bail bond professionals:
- Excellent relationship building and interpersonal skills
- A high level of intellectual curiosity, with interest in a wide range of industries
- A desire to constantly improve and grow
- Analytical skills
- Business oriented
- Problem solving mindset
Now is the time to consider a career in bail
For anyone making career plans, now is the time to consider bail because there is a need for more talent.
A large number of professionals will be retiring in the coming years, so the industry is doing what it must to recruit and train the next generation of sureties and agents.
To meet their talent needs, a number of companies, including IAT, offer summer internships to college students and also have trainee programs designed for entry-level roles – both in surety and other insurance jobs.
The industry is also doing more to promote diversity. For example, IAT’s Surety business unit sponsors a scholarship to the Surety and Fidelity Association of America’s (SFAA) Surety Foundation, which works to increase diversity in the surety and fidelity industry.
For more information on what a career in surety at IAT can offer, visit our website.
[1] Surety Bonds Direct “4 of the Biggest Industries Requiring Surety Bonds”, 5 Feb 2021.
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