An insurance agent who can accommodate clients’ surety bond needs along with their insurance is a well-rounded agent. You are providing your insureds with top-notch customer service and instilling confidence that you can handle all of their business.
The more insurance products that agents have to sell, the better, instead of one specific type for one specific type of entity - in the industry we call these exit barriers. The following are different types of products agents can pitch, representing cross-selling "exit barrier" opportunities:
Business Services Bond
Service industry business owners often have employees or sub-contractors, such as plumbers and electricians, who work on a customer’s premises, with access to the customer’s valuables. The business services bond is a basic theft-only policy that covers both the business owner and the customer. It represents a great cross-selling opportunity for the insurance agent who has service business clients. It’s also a marketing tool for the business owner, who can advertise his or her business as “bonded and insured,” giving it a competitive advantage. Here is a sample list of service business that would need a business services bond, and more reasons to have a business services bond.
Commercial Crime Policy
Employee theft can cause a great hardship on a business’s finances, especially a small business. It is estimated that an average of 5% of annual revenue is lost to theft or fraud. The median amount stolen is $175,000, and the majority of losses due to employee theft are never recovered. A commercial crime policy is a good cross-sell opportunity to offer nonprofits or other organizations that want to bond the people who handle their money or accounting responsibilities.
Any insurance agent who is already selling a client a business owner policy should automatically offer a commercial crime policy, too. A fidelity bond can give your insured the extra coverage they need, especially since the crime coverage offered in a property and casualty package is very likely not enough for most businesses. There are two scenarios to consider as an agent:
- You’ve offered your insured a commercial crime policy as additional coverage and your insured takes your advice and has a policy in place. An employee steals and the loss is confirmed to be covered under the policy. So, those funds are protected and can be recovered.
- You do not offer your insured a commercial crime policy and his business has an employee theft occurrence. Later, your insured finds out that this is a coverage that you, as their agent, could have offered to protect them. Your insured could lose trust and confidence in your relationship.
Performance and Payment Bond
Performance and payment bonds are required for various projects, especially if it's city or public work. Basically, this type of surety bond is a protection for the owner, stating that the contractor will perform the job according to the contract specifications, as well as pay their sub-contractors and suppliers. If the contractor fails to complete his contractual obligations, the surety company will step in and complete the job and/or pay the claim.
This is a lost opportunity for many agents who do not feel they can or want to handle their clients’ surety bonds. If you refer your client to another agent for their surety bonds, you leave the door open for that agent to eventually take over your client’s insurance needs. Performance and payment bonds are a great example of a cross-selling opportunity to help you keep your insureds’ business by fulfilling their needs.
ICC Broker Bond
For agents who specialize in trucking insurance, the federal ICC broker bond is one of a number of bonds that are specific to that industry. It protects against fraud or unethical actions by the freight brokers who match shippers with transportation services for transporting goods. The federal government requires transportation brokers to purchase an ICC broker bond to operate as a business.
Super Heavy/overweight Bond
As agents are selling their trucking insurance, they should know, or be knowledgeable enough to ask whether the state requires their client to get a super heavy bond. This bond guarantees prompt payment of all special permit fees and charges due for operating vehicles of excess weight or dimension on state highways.
Cross-selling bonds such as what we have mentioned, cements the insurance agent as an invaluable asset to the client. When you can offer your clients other products, you strengthen the relationship while further protecting your client. Agents should get in that mindset. Know what type of business or personal life your clients have, then pinpoint what type of bonds they need.
The broader your spectrum of products, the more valuable you are.
Sharyl Markovits is a Executive Surety Marketing Representative in the Old Republic Surety Company Dallas, Texas office. Sharyl started her surety career in 1992 with a Dallas based bond-only agency. She brings a wealth of knowledge and experience to Old Republic with her agency and company underwriting and management experience. She has experience with both Contract and Commercial surety.