Posted by Darrel Lamb, CPCU, AFSB, for OldRepublicSurety
Any definition of surety will list the three signing parties in a contract surety relationship: the principal (or contractor), the obligee (or owner of the project) and the surety. But often overlooked is the trio of surety players who work together for mutual benefit: the surety, the principal and an independent agent.
Steve Hanson, recently retired independent surety agent, Eugene, Oregon, describes that three-way surety relationship as a “trust triangle.” He observes that the “trust derived from shared experience and evolving (over time) mutual respect, both professional and personal,” is the most important building block of a business relationship. That is especially true for large surety contract accounts because they are not handled transactionally.