Simple Solutions Blog

3 Steps to help an insurance agency start writing surety bonds

 May 10, 2024     UFG Insurance    Surety  Read Time: 4 min

By Erle Benton, AVP, Surety Contract Underwriting, UFG Surety

Thinking about expanding your insurance agency’s book of business? Surety bonds might be a great addition.
According to the Associated General Contractors of America (AGC), construction accounted for 919,000 U.S. establishments in early 2023. It’s a vibrant industry that’s crucial to the economy, and it relies on contract bonds to keep projects on the move. And construction isn’t the only industry that needs a bond. Others such as janitorial services, plumbers or even elected public officials sometimes require a commercial surety bond now and then.
Surety is a fascinating — and rewarding — book to start writing. But where do you begin? Here are three steps to help an insurance agency start writing surety bonds.

1. Set your sights on learning about the construction and surety industries.

If surety is an entirely new field for you, my advice as a UFG Surety underwriting leader and surety industry class instructor is to embrace the opportunity to establish expertise in this lucrative line of business. And if you’re already familiar with the field, don’t be afraid to expand your knowledge. The more you know, the stronger partner you can be for contractors and sureties.
A simple starting place may be to get involved with your local chapter of the AGC or Associated Builders and Contractors (ABC). These resources can help you understand the evolving needs of the construction industry.
Consider looking into surety learning resources, such as:
  • Surety classes offered through the Associate in Fidelity and Surety Bonding (AFSB®) program from The Institutes Knowledge Group™. You may find it worthwhile to take a few courses, or even pursue an AFSB designation. Either way, you’ll likely appreciate the education.
  • Resources from the National Association of Surety Bond Producers (NASBP®). Their website offers educational materials you might find interesting and can help you decide if surety bonds are a good fit for your agency. There are plenty of resources for non-members to explore, but members receive extra information.
  • Read and watch. If you’re a reader, “The Basic Bond Book” may offer some thought-provoking points and, of course, there are no shortage of engaging industry magazines. You can even tap into YouTube tutorials if you enjoy learning by listening.

The teacher in me can’t resist sharing an interesting tidbit about the history of surety bonds while on the topic of learning. In 1935, President Franklin Delano Roosevelt (FDR) signed The Miller Act, forming the base of the surety industry by requiring bonds from some contractors that were working on federal projects. A little-known fact is that FDR worked for an insurance company prior to his presidency, likely giving him a unique personal perspective about the importance of bonds. And, if you’re a historical-preservation buff, the desk from FDR’s insurance career was donated to his presidential library.

2. Evaluate your market and staffing needs.

If you’re leaning toward adding surety bonds to the book of business at your agency, one important step may be to give some thought to staffing. Ask yourself, who can execute the various bonds? You’ll likely need a detail-oriented person at the helm who understands how to work with confidential information as a trusted advisor in this relationship-driven industry.
This individual would need to be comfortable working in time-sensitive situations, especially when it comes to bid bonds that need to be signed, correctly executed and included in bid packages. This way, the risk of a contractor losing a project due to a problem with the bid bond (or non-performance) is reduced. You may also want to consider a proofreader — a different employee who can help identify and correct errors before releasing the bond.
While you’re evaluating the business side of things, it’s a good idea to survey your insurance carriers to determine who provides surety bonds. Look into what types of bonds they specialize in and the resources they can offer. At UFG Surety, for example, we pride ourselves on being responsive, trusted and knowledgeable partners who go the extra mile for both agents and contractors.

3. Lean on your network to start building your surety bond book of business.

It may be easiest to start with your existing customers when it comes to building a surety book. Are you providing insurance to contractors? Perhaps they have a need for surety bonds. Your established relationship with them could be a solid foundation to build on.
Consider talking with attorneys, certified public accountants or bankers who you know serve contractors. They may be willing to share referrals to help you get started.

The bottom line

Surety bonds are incredibly important in helping construction companies secure the work they need to flourish and grow. Writing surety bonds has the potential to help an insurance agency do the same, with competitive commissions and other profitable aspects.
If you’re ready to explore a partnership with a surety carrier, I hope you’ll think UFG Surety. Email us at and let us know how we can help.


The information provided is for informational purposes only. Every attempt is made to ensure that the information is accurate; however, it is not intended to replace professional advice. For more information, see Disclaimers & Other Legal Documents.