Ready for Growth? Start with a Stronger Surety Relationship
Business Categories
By: Jack Russell, Surety Risk Advisor
Consider this: A contractor is in the midst of a record year. They are doubling, nearly tripling their revenue year over year. The next logical step is larger projects, which means larger bond needs. This leads to a shift in conversation with their agent/broker. The surety requests CPA-reviewed financial statements instead of internal statements, along with a stronger balance sheet and evidence that profits are being reinvested in the business.
This is not punishment for success — it’s preparation for scale. Sureties back growth that’s sustainable.
Underwriting expectations are rising as the surety market continues to grow, projected to reach nearly $32 billion by 2031. For contractors, this environment creates both opportunity and pressure. Earning and keeping higher capacity relies on financial discipline, operational readiness, and programmatic planning.
There are different qualifications and requirements for the varying levels of surety bonds, and finding the right fit for each level is important. Sureties have different appetites for different types of risk. The larger the job and the longer it takes to complete, the more complex it becomes, and the greater the associated risk. Financial strength, internal controls, and professional reporting all improve a principal’s case for growth.
Character is about trust and transparency. Sureties want to know who they’re backing: how leadership makes decisions, how the company handles challenges, and whether communication is open and consistent. The way a contractor discusses setbacks, change orders, and delays says as much about the business as the balance sheet. All businesses go through hardship (ups and downs), and eventually, there are losses or unprofitable jobs. How an organization handles adversity shows more about its integrity and resilience than when everything is going perfectly.
Capital reflects a company’s financial strength, including working capital, retained earnings, and liquidity. Keeping profits within the company signals a long-term strategy and gives underwriters confidence that the business can withstand short-term disruptions. For growing contractors, this often means transitioning from internally prepared statements to CPA-reviewed or audited financials, which demonstrate the kind of rigor larger surety programs expect.
Capacity measures a business’s ability to perform and its operational bandwidth. Sureties assess workload, contracts completed, backlog, project size, and geographical footprint to gauge if growth is being managed responsibly. Taking on too many projects or expanding into unfamiliar markets can raise red flags.
When all three factors align consistently and clearly, principals are more likely to have the opportunity to increase bond programs and support future growth.
Every conversation held is aimed at ensuring the organization's sustainability and exploring how it can capitalize on the current market. Growth can be situational; there are peaks and troughs in every market. Some types of construction are more resilient during recessions, but companies need to be in a position to take advantage of “peak market” opportunities while also protecting themselves through risk management for potential hardships.
These conversations don’t have to be complicated. What matters is consistency and keeping your surety informed about where the business is headed, how projects are performing, and what changes may be on the horizon. Regular communication provides all parties involved with the visibility and knowledge necessary to support your business.
To keep the relationship strong and forward-looking:
This is where a strong broker relationship makes all the difference. The surety world is a small, relationship-driven industry. Many brokers have worked with the same underwriters for years, and those connections can open doors when you need to transition to a new partner. In some cases, a change is necessary, and in others, the current program satisfies the needs if growth is not warranted. In either situation, it is important to have a backup in place if things are not being handled appropriately. When you start working on bonded business, a good broker will pre-underwrite your company, assess the options, and introduce you to sureties whose programs and culture align with your business goals. As you grow, it is essential to reevaluate your options and find the right fit for your situation and future growth opportunities.
Growth demands the right backing. Discuss your bonding program with a Towne Insurance surety specialist to align it with your growth goals.
Consider this: A contractor is in the midst of a record year. They are doubling, nearly tripling their revenue year over year. The next logical step is larger projects, which means larger bond needs. This leads to a shift in conversation with their agent/broker. The surety requests CPA-reviewed financial statements instead of internal statements, along with a stronger balance sheet and evidence that profits are being reinvested in the business.
This is not punishment for success — it’s preparation for scale. Sureties back growth that’s sustainable.
Underwriting expectations are rising as the surety market continues to grow, projected to reach nearly $32 billion by 2031. For contractors, this environment creates both opportunity and pressure. Earning and keeping higher capacity relies on financial discipline, operational readiness, and programmatic planning.
There are different qualifications and requirements for the varying levels of surety bonds, and finding the right fit for each level is important. Sureties have different appetites for different types of risk. The larger the job and the longer it takes to complete, the more complex it becomes, and the greater the associated risk. Financial strength, internal controls, and professional reporting all improve a principal’s case for growth.
Character, Capital, and Capacity
Every surety relationship is built on three underwriting fundamentals — character, capital, and capacity — whether we are “underwriting” a new client or an existing client's account, the same factors are used to evaluate the company.Character is about trust and transparency. Sureties want to know who they’re backing: how leadership makes decisions, how the company handles challenges, and whether communication is open and consistent. The way a contractor discusses setbacks, change orders, and delays says as much about the business as the balance sheet. All businesses go through hardship (ups and downs), and eventually, there are losses or unprofitable jobs. How an organization handles adversity shows more about its integrity and resilience than when everything is going perfectly.
Capital reflects a company’s financial strength, including working capital, retained earnings, and liquidity. Keeping profits within the company signals a long-term strategy and gives underwriters confidence that the business can withstand short-term disruptions. For growing contractors, this often means transitioning from internally prepared statements to CPA-reviewed or audited financials, which demonstrate the kind of rigor larger surety programs expect.
Capacity measures a business’s ability to perform and its operational bandwidth. Sureties assess workload, contracts completed, backlog, project size, and geographical footprint to gauge if growth is being managed responsibly. Taking on too many projects or expanding into unfamiliar markets can raise red flags.
When all three factors align consistently and clearly, principals are more likely to have the opportunity to increase bond programs and support future growth.
How to Keep Your Surety Relationship Strong
A strong surety relationship is built over time, not just at your annual renewal. Ongoing dialogue with your broker throughout the year helps ensure that when the next big opportunity arises, everyone is aligned and ready to act.Every conversation held is aimed at ensuring the organization's sustainability and exploring how it can capitalize on the current market. Growth can be situational; there are peaks and troughs in every market. Some types of construction are more resilient during recessions, but companies need to be in a position to take advantage of “peak market” opportunities while also protecting themselves through risk management for potential hardships.
These conversations don’t have to be complicated. What matters is consistency and keeping your surety informed about where the business is headed, how projects are performing, and what changes may be on the horizon. Regular communication provides all parties involved with the visibility and knowledge necessary to support your business.
To keep the relationship strong and forward-looking:
- Schedule regular check-ins. Meet with your broker on a regular basis and lean on their expertise to bring in the surety company at the right time. While it may not be vital for all contractors to meet with their surety company annually, for some, it is essential to meet with the surety at least once a year, after the financials are finalized. For firms experiencing rapid growth, semiannual or quarterly meetings are worth considering. Use these sessions to review backlog, upcoming bids, and capacity goals, as well as to confirm that your bonding program aligns with the pace of your work.
- Be transparent about change. Whether you’re expanding into new regions, adjusting your project mix, creating a joint venture for a specific purpose or project, or preparing for a leadership transition, bring those developments to the table early. Sureties are less concerned about change when there are no surprises. Explaining what’s driving the shift — such as following a long-standing client into another market — is vital to demonstrate that growth is intentional and well-managed.
- Track your capacity and share the story behind it. Maintain clear records of active projects, schedules, and margins. If timelines extend or costs fluctuate, communicate the context and provide a clear narrative. Sureties value visibility and foresight — and transparency strengthens trust more than perfection ever could.
Ensure Your Surety Can Grow with You
Sometimes your current surety program no longer fits as comfortably as it once did. That’s not a sign of failure — it’s simply a byproduct of scaling. A surety that once matched your project size or risk appetite may have a different focus now, or your business may have outgrown its limits. If you’re consistently running into slow approvals, lower allowable capacity, or difficulty securing bonds for the work you’re pursuing, it may be time to reexamine the fit.This is where a strong broker relationship makes all the difference. The surety world is a small, relationship-driven industry. Many brokers have worked with the same underwriters for years, and those connections can open doors when you need to transition to a new partner. In some cases, a change is necessary, and in others, the current program satisfies the needs if growth is not warranted. In either situation, it is important to have a backup in place if things are not being handled appropriately. When you start working on bonded business, a good broker will pre-underwrite your company, assess the options, and introduce you to sureties whose programs and culture align with your business goals. As you grow, it is essential to reevaluate your options and find the right fit for your situation and future growth opportunities.
Growth demands the right backing. Discuss your bonding program with a Towne Insurance surety specialist to align it with your growth goals.