By Don Appleby and Andy Tokasz
Sharing news, gossip, or rumors in the workplace happens anytime people get together. It’s human nature. But this behavior is potentially damaging in our industry. Access to our clients’ private business practices and financials, combined with turnover among surety producers and underwriters, makes for a potentially leaky combination.
During the informative National Association of Surety Bond Producers (NASBP) Sales Workshop, Larry McMahon, Executive Vice President and Surety Manager at Alliant Insurance Services, and consultant Jonathon Paul explain how, “information is currency.” They are talking about working hard and actively being informed about the marketplace. We would add that information is also power, and with power comes responsibility—responsibility to maintain the confidentiality of sensitive business information learned through client interactions. It’s about maintaining trust among the people we’re doing business with. They trust us to keep their business matters confidential—whether it’s good news or bad news.
You can’t un-lose information collected in your memory bank. There may be enormous pressure when taking a position with a new firm. Information gleaned from previous clients at previous jobs can be used to benefit your new position. We know this firsthand. Underwriters and producers alike may be tempted to share information from many different clients that really should be kept in your memory bank and not shared with others. When people speak with you in confidence, they have a reasonable assumption that it stays between you and them.
Sureties and agents often act as sounding boards for clients who seek advice about continuity of their business. Perhaps a client is thinking of selling his or her company. Imagine what would happen if word leaked out that a key customer was thinking of selling. It would not be good for anyone. There is a time to share this information, especially with underwriters; but it’s typically not the first time you hear it from a customer. Plans can change from week to week; a decision may never be made. Clients should understand that you will maintain confidences, but that some decisions may trigger an obligation to disclose to the underwriter. Our key point is that we often find ourselves in very private, personal conversations about the future and plans for a customer’s business. It’s good, and it’s OK, to just listen. Committing to just listening and keeping it between you and your client is a key to maintaining trust, especially when no decision on a sensitive matter has been made.
Many agents help clients pre-qualify subcontractors, and often surety bond professionals see more than their clients’ own financials. The clients’ and the subcontractors’ information should be treated like gold, under lock and key. What you’re seeing is private. Let’s remember to treat it that way.
Trust is a valuable commodity. Relationships can take years to build but only a few minutes to unravel. Here’s one scenario. A prospective customer keeps his financial condition very private. But a financial event occurs that requires discussion with the surety and lending professionals. News of the event leaks, and the contractor is none too happy. It tainted his view of the surety business. It causes great consternation and puts into question the relationships in place. Damage is done. If trust were a bank account, it was a massive withdrawal. It takes a long time to build that back up.
Inevitably, in the course of our business, someone says:
“Did you hear about _____?”
“_______ is going out of business.”
“_______ has a very tough project and is underwater financially.”
“_______ So-and-so is getting divorced. I wonder what that’ll do to the business.”
Everyone recognizes the rumor mill. You can’t stop that kind of behavior. But when we’re all trying to be professional, and we’re all part of a professional organization like NASBP, let’s not sink ships. Let’s be professionals. Where does duty lie? It comes back to the relationship you have with the customers and underwriters. Your duty includes confidentiality. It’s an area of our business that is rarely discussed, but it is an area that should be.
The next NASBP Sales Workshop, mentioned above, will be held in conjunction with the NASBP Winter School the week of January 19, 2020. Make a note to visit www.nasbp.org in August when registration opens.
Don Appleby is Surety Director at Holmes Murphy & Associates in the greater Denver area. He has worked in the surety industry for 30 years–starting with his first job out of college. Appleby is an active member of the NASBP Ethics Committee and has taught the NASBP Sales Workshop. Appleby can be reached at email@example.com or 720-622-8360.
Andrew Tokasz is Vice-President and Director of Surety at USI Insurance Services in Buffalo, NY. Tokasz is a 24-year veteran of the industry and serves as Chair of the NASBP Ethics Committee. Consider joining the NASBP Ethics Committee (http://www.formstack.com/forms/nasbp-committee_interest_form) and helping your NASBP colleagues to heighten membership awareness of the Association’s Code of Ethics and to elevate individual and collective ethics of surety bond producers and the overall surety industry. Tokasz can be reached at firstname.lastname@example.org or 716-314-2006.