Benefits of an In-House Surety Claims Team


When selecting a surety partner, contractors may not anticipate, or even consider, claims that may be made against the bonds securing their obligations. Surety claims are, however, a real-world possibility, and even well-managed and well-capitalized contractors may find themselves faced with disputes that could result in surety claims.

The risk of surety claims is only magnified during challenging times such as that with which the world is currently facing. During these challenging times of unprecedented economic and social disruption, partnering with a surety with an experienced, well-integrated, in-house claims team is invaluable.

Since in-house surety claims teams are likely integrated with other internal business units, such teams tend to be more efficient and effective. For example, the length of the claims process has long been an industry pain point, and outsourcing claims may possibly lead to longer response times. While third party administrators are forced to deal with different corporate cultures among sureties, which may require time to learn about the claim and the account’s circumstances, in-house claims teams are likely more familiar with the surety’s customers and projects. “We have strong business relationships with our underwriters, which definitely adds to our effectiveness,” said James Gibson, Senior Vice-President and Senior Claims Officer at Liberty Mutual Surety. “Through effective in-house coordination, we can make decisions and execute much faster than we could if we had to liaise between our customers and the outsourced provider.”

In addition, with the consultation and input of underwriters and others who have an in-depth understanding of an account’s financial circumstances and work programs, in-house claims teams are positioned to deliver creative, tailored solutions rather than one-size-fits-all claims responses. A collaborative, deep-seated relationship between the claims team and underwriters and, often, between the claims team and the surety account, fosters trust, transparency and open communication, all of which may not be as readily achieved by third-party claim administrators.

It is that trust and free flow of information that routinely allows in-house claims teams, in consultation with underwriting, to mitigate challenges and disputes, sometimes before a formal claim is received. “Our best-case scenario,” explained Gibson, “is when we, in coordination with our in-house business teams, recognize and act upon opportunities for possible early intervention, which may lead to faster resolution of the underlying problems, thus reducing time and expense factors for all interested parties.”

Even when circumstances do not allow for pre-claim mitigation, strong in-house business relationships allow in-house claims teams, in collaboration with underwriting and others, to craft creative, business-based claim solutions that generally result in the best possible outcome for all interested parties. “Of course, no one is ever hoping to receive a claim,” said Gibson. “But we recognize that all interested parties should be able to count on the surety delivering on the promise of the bond by providing prompt, efficient and effective claims service,” he says.

It is almost always in the best interest of contractors to seek sureties with in-house claim teams that understand both the legal and business aspects of the construction industry and suretyship. Liberty Mutual Surety fits that bill. Our institutional strength is derived in large part from the integration between our experienced underwriters and our dedicated claims professionals, which include experienced lawyers, engineers and accountants. Working together, we can respond efficiently and effectively to even the most challenging of claims situations, and, in some cases, mitigate disputes before they develop into formal claims.

Essentially, Liberty Mutual Surety provides a sophisticated set of risk control resources for clients – because the best surety claim is the one that all interested parties work seamlessly together to avoid.

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