In this article we will sort out the differences and explain why it is important to know.The bonding company is like the manufacturer of the product. The bonding agent is the manufacturer’s rep, the sales person who performs the retail side of the transaction.When it comes to bid and performance bonds, most contractors obtain their bonds from bonding agencies. However, some may be dealing directly with bonding companies and not appreciate the difference. Actually, there are important implications.The “Big I” is the symbol of the national organization: Independent Insurance Agents and Brokers of America Inc. You can also find their information under the “Trusted Choice” logo. This is a national organization with 140,000 member insurance agents. They serve the retail function as intermediary between the insurance company and the retail customer (contractors and others).
The alternative arrangement is to do business directly with the insurance company. In this scenario, the customer is dealing with a captive agent directly employed by one insurance company and whose products are all that the agent may offer.The difference is significant and important for customers to understand. The Trusted Choice (Independent Agents) tagline is Free To Do What’s Right For You. That’s the whole point: An independent agent is free to offer the products of many insurance/ bonding companies, and find the one that’s best for you in the process. To put it simply, captive agents must fit you into one of their company’s products or risk not making a sale.When it comes to surety bonds, the same holds true. The independent bond agent has access to a number of sureties (insurance companies) and can find the best one for the customer. The companies may even compete for the business resulting in better terms for the client.
The captive agent must offer the products and programs of their employer, even if the client is a square peg in a round hole.Independent agents are likely to point out that they represent a broad range of markets (insurance companies) but a captive agent may fail to mention they have access to only one.Do you have a to-may-toe, or a to-mah-toe?What is the easy way to know if you have an independent or captive agent?”What markets do you represent?” If the answer is a single company, you are talking to a captive agent who does not provide access to a variety of markets that may compete for your business. If they rattle off a list, “We have Company A, Company B, Company C, etc… ” that’s an independent agent.”Let’s Call the Whole Thing Off” is a song written by George and Ira Gershwin in the 1937 film “Shall We Dance” where it was introduced by Fred Astaire and Ginger Rogers as part of a celebrated dance duet on roller skates.The song is most famous for its verses comparing different regional dialects.Steve Golia is an experienced provider of bid and performance bonds for contractors. For more than 30 years he has specialized in solving bond problems for contractors, and helping them when others failed.The experts at Bonding Pros have the underwriting talent and market access you need. This is coupled with spectacular service and great accessibility.