“Surety is about solving problems,” says Steven Coward. “A problem doesn’t necessarily mean bad credit – more often than not something is simply out of balance, or there is a final piece missing from the puzzle. Our task is to restore balance or complete the picture but also to question whether we should be viewing this from a different perspective? And I love that challenge.”

As Managing Director for Surety, Steven’s expertise in surety and risk management adds an extra dimension to the services Varney provides to commercial real estate clients. Steven and his team of surety specialists identify and solve practical and financial puzzles that might otherwise hamper projects.

Surety can play an extremely important role in real estate projects. Any project backed by public money requires use of a bond to ensure delivery; and while privately funded projects may not require use of a bond, surety is often a very useful tool for developers hiring contractors to complete a project.

Steven has more than 40 years’ experience of working in surety, including as a managing director at Frankenmuth and at CorePointe; and as CEO of the Berkley Surety Group. He was headhunted by Varney Executive Vice-President Mike Varney in 2019 to develop Varney’s surety services.

“What we bring to the surety relationship is experience and creativity,” Steven explains. “We have the experience to be able to analyse and identify sensitive issues or problem areas, so we can work to improve those, prior to presentation to a surety. Our creative thinking can really expedite the process, making it easier for everyone. Our goal is that when it gets to critical decisionmaking, everything leads to the best possible solution.”

This isn’t always straightforward. “When surety credit is working, everything is in balance, but as companies grow, economic conditions change, or pandemics hit, the equation changes, creating an imbalance,” Steven explains. “Our job is to dig deep into the problem and restore balance in the surety credit function.

“Surety credit can create complex puzzles, because the underwriter’s consideration extends beyond the financial numbers, to look at other factors, including corporate stewardship, the project management team, fleet capabilities and banking,” he continues. “On the project side of the equation, the underwriter has to consider historical completion, the type of work being performed, the quality of subcontractors, the time for completion, contractual language and penalties – the list goes on. Our challenge is to make a 5,000 piece puzzle as quick and easy to solve as a 500 piece puzzle.”

Surety can also play an important role in a situation where a real estate project requires improvements to public facilities near a project site, such as street lighting, traffic signals, sidewalks, water, sewers or parking. Any of these may become a subject of negotiation over whether responsibility for these improvements should fall on the city, the developer, or another party.

“We can look at the scope of what needs to be done, counsel our client on their options and help them negotiate a solution that may involve posting of a site improvement bond on behalf of the developer,” says Steven.

The surety team are as committed as other colleagues at Varney to delivering responsive, personalized services tailored to meet a client’s specific requirements. The complacency that has crept into parts of the commercial real estate insurance sector in New York may also be present in some current surety relationships. Steven believes the approach Varney brings to this market add up to an offer that will deliver more effective and beneficial use of surety, supporting Varney’s promise to be a risk management champion for every client.

But for Steven personally, the two most appealing parts of his job are the people he works with and the perennial challenge of using surety to solve puzzles. “I’ve been fortunate to work with developers and contractors from coast to coast and border to border,” he says. “Each of them is different, because the individual owners are all unique and talented. One of the rewards for what we do is spending time with these great entrepreneurs and learning from them. Which of course means that you can teach an old dog new tricks.”

He is certainly glad that Mike approached him when he was thinking about bringing a premature end to what had already been a very successful career. “Mike said: ‘You don’t want to retire – come work with us!’” he recalls. “And it’s been a wonderful ride.”

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If you’re interested in finding out how Varney can work for you, and where our approach to surety can play a role in supporting your work, please contact Steven or anyone in our Real Estate team.