Ontario Construction Report special feature
A leading global insurance broker, HUB International offers a broad array of products and expertise, including construction industry surety products.
Scott Beitel, Ontario surety leader, says part of his role is working with people in similar roles across the country to enhance and promote surety products. “There are differences regionally depending on the municipality and bond owner which are important to understand,” he said. “HUB’s breadth of experience and geographic range makes this easier.”
Beitel says despite the fact that surety has been around for a long time, people still don’t understand its complexities. He says surety is less an insurance product and more of a financial underwrite and that it is not as simple as insurance to secure. “Surety is a more intimate process,” he says. “One of our first tasks is to educate our clients on the process involved and the time commitment.”
Factors influencing the ability to secure surety include financial statements, contract structure and contractor experience, among other things. Therefore, Beitel says a solid understanding of clients, their history and capabilities is required and involvement from many stakeholders may be required.
He says early involvement with clients is crucial because a surety bond broker can identify problems with contracts early on and then act as a resource, consulting across a range of specialties. “We have consultants we can call on for legal clarification, or for engineering advice,” says Beitel. “Many of us have specific industry experience. As an office specialized in surety, we review multiple contracts daily so we have experience other firms may not.”
With industry changes including project bundling, Beitel says competition from foreign interests, decreased margins and more onerous contracts make it more challenging for contractors, and additional issues including heavy cash flow concentrations and hold-backs add additional pressure.
Beitel says that by “getting involved in a project early, HUB becomes a business partner both on the surety and non-surety side. We can help structure a contract with the end in mind and can assist with other aspects of the business to ensure a project succeeds.”
In the coming years Beitel says he expects the long-talked-about electronic tendering process will come to fruition, which will add more complexities. “HUB has been on the forefront of electronic bonding, helping develop programs and implement software. It will be important for contractors to be aligned with brokers who are ready to support the electronic tendering process.”
HUB also provides clients a full range of insurance products.
Nelly Toledo, a Canadian Accredited Insurance Broker with HUB, has 30 years of insurance experience with a 20-year construction industry focus to help her clients meet their risk management needs.
“I meet regularly to discuss my clients’ progress or any project issues they may encounter,” she says. “Part of my job is to be constantly sharing ideas to ensure my clients are receiving top notch advice and service.”
Toledo says that from an insurance perspective her clients’ biggest challenges involve premiums and claims. “In the situation where (a client’s) claims may be unfavourable, affecting premium, our account team will work closely with our risk control and claims department to manage and improve our client’s loss control and to ensure claims are properly adjusted.”
She says HUB’s reputation, expertise and experience has a positive impact on insurer relationships and premiums.
Toledo says whether contractors are looking at surety or insurance products, the key is to ensure satisfaction with their broker’s service. “Choose your broker, not the market,” she said. “If you are confident that your broker is properly representing you, is knowledgeable and provides you with expert advice and solutions, then you are where you need to be.”