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January 31
15:30 2022


What two agents say about the “Triangle of Trust” in surety

By Darrel K. Lamb, CPCU, AFSB

“Relationship” might be the most-overused word in American business (followed by “partnership”). It’s the topic of hundreds upon hundreds of songs in nearly every genre that illustrate love and support:

“I’ll be there for you (‘cause you’re there for me too’)”

—(Theme from Friends), The Rembrandts

“If you’re lost, you can look and you will find me”

—Time After Time, Cyndi Lauper

“Lean on me/When you’re not strong/and I’ll be your friend/I’ll help you carry on … For it won’t be long/Till I’m gonna need somebody to lean on”

—Lean on Me, Bill Withers

As they say, art imitates life. You don’t need a song to tell you that, in the business of contract surety (like many lines of business), establishing and maintaining relationships is very important.

Any surety textbook will point out that the contract surety relationship is a three-party one between the principal (contractor), obligee (owner), and the surety. But what most surety textbooks fail to mention is that another very important three-party relationship exists between the contractor, the agent, and the surety.

One agent I have worked with refers to this three-part relationship as the “triangle of trust”:

  1. Contractor
  2. Independent agent
  3. Surety carrier

In order to last, these three parties must create and build strong relationships amongst and between them. In the often-steady world of surety in past decades, that was easily accomplished. Little seemed to disturb relationships.

Such relationships still are the hallmark of contract surety. But the need for greater technology capabilities, the complexity of construction projects, and the growing number of parties involved in any one contract surety obligation place greater demands on parties in these relationships.

The mutuality of relationships applies to surety. Each of the three partners must consider more than what is in his or her own best interest—but also what is in the best interest of two other surety partners, most of all the client. Many of the independent agents I work with have the client’s back while also being considerate of the surety’s needs and goals.

Steve Hanson is a professional surety producer based in Eugene,

Oregon, who operated in several states and who has recently retired. Steve is also a long-time friend and mentor.

In a recent conversation, he reiterated insights about what makes agent-surety-client relationships work:

  1. What are the building blocks of a business relationship? The most critical building block is ​trust derived from shared experience and evolving (over time) mutual respect, both professional and personal.
  2. When and how does it become more of a “people relationship”? Once enduring trust is established, a bona fide partnership can develop. This is marked by individual interest blending into mutual interest, where each party is working in good faith for common goals.
  3. Why is a surety-agent-principal relationship especially important now? Surety bond markets are currently still pretty soft. So, underwriting is at times a little less rigorous than during tight credit conditions. Therefore, surety producers and underwriters must help each other avoid pitfalls and complacency.
  4. What else makes the tripod strong? Producers and underwriters who collectively choose good, mutual customers (who themselves “buy into” the partnership) are truly creating the “triangle of trust.”
  5. What else can be involved in the relationship? Likeability, affability and good humor are additional ingredients. So, too, are decency and mindfulness.
  6. Any other points? Darrel is an effective underwriting partner, and I hope he considers me an effective agent/producer. We recognize what the other needs in order to properly and effectively do our jobs and roles. We each strive to provide the information and tools that enable one another to fulfill our duties while working effectively toward mutual goals in good faith with one another.

For myself as a surety underwriter, I had the benefit of growing up in a household where my dad was an insurance agent. I think that has always given me a slight edge as an underwriter because I know exactly how an agent makes a living. I have always understood that the producer is my partner.

I have seen underwriters, at least early in their careers, make the mistake of considering the agent as a mere link in the distribution chain—just there to serve underwriters in providing what’s needed. With time and coaching, under-writers eventually learn the value a good agent brings to the relationship. Without the agent, we have no connection to our contractor client.

Showing that kind of respect to agency partners can generate respect back, and from that foundation a good relationship can grow.

Each of the three partners must

consider more than what is in his or her own

best interest—but also what is in the best interest of

two other surety partners, most of all the client.

Another successful agent and friend I’ve worked with on surety production is Mike Gale of The Buckner Company in Ogden, Utah. He offered me the following insights:

  1. What are the building blocks to start and create a business relationship? Several factors can create and enhance a business relationship, especially in the surety business. While knowledge of the surety world plays a major role, it is also helpful if the surety representative is knowledgeable of the market that the agent lives and works in. The surety person might know all there is to know about surety, but if he or she does not know the market the agent resides in, it is difficult to build a relationship that benefits the surety, agent and client. This knowledge comes from many areas, including personal visits, research, attendance at local association functions, etc.
  2. When and how does it become more of a “people relationship”? When all involved can see a mutual understanding of what the desired surety goals are, and all parties develop trust with one another, the relationship moves to more of a personal, people arrangement. This means all parties are comfortable sharing information, desires, and goals. At a qualitative level, each enjoys knowing there is a developing bond that benefits all.
  3. Why is a surety-agent-principal relationship especially important now? I have been in this business 30-plus years. And the relationship between the three parties has never been more important. Most recently, we have dealt with concerns of the pandemic, the economy, domestic and world issues, and a constantly changing landscape of surety markets and personnel. It is vital that the relationship remain strong. Both the agent and the client need to feel that they are backed not only by a strong surety, but also a strong, capable, and viable surety team. And the surety needs to feel that the agent and the client are doing all that they can to remain financially strong and can weather the storm of an uncertain and changing market and an uneven landscape.
  4. What else makes the agent-surety-contractor relationship strong? Trust is a must in this business. All members of this relationship need to trust one another and know that everyone has the best interests of all involved.
  5. What else has been involved in the Lamb-Gale relationship? I truly value the input of Darrel and others like him in the surety business. I trust his judgment, intuition, and advice. I always feel that he is my partner when I am working with my clients. Most of all, I value his friendship.
  6. Any other points? It is important to have a surety partner that is willing to listen, to make suggestions, and to provide advice and options. It is also important for a surety partner to say “no” when the numbers or project do not make sense for all parties. These circumstances require not only intelligent and effective underwriting, but also great communications.

Like good music, surety relationships take a team effort and a sustained performance. As you consider adding or expanding surety as a line of business, I urge you to keep in mind the “triangle of trust” relationship that can help you and your agency succeed.

The author

Darrel K. Lamb, CPCU, AFSB, is regional vice president of Old Republic Surety Co., which ranks among the nation’s top underwriters of contractors performance and payment bonds, miscellaneous surety, and commercial fidelity bonds. A national firm, Old Republic Surety works with4,000 independent insurance agencies. To learn more, visit or email

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