Back when I was a young lawyer and doing a little of everything to keep body and soul together, I had my first probate case where a client had to post a bond with the court. The insurance brokers I knew at that time were assigned risk brokers and they were no help in advising me about bonds. Luckily, some more experienced lawyers I had met in court suggested an insurance agency that they said specialized in issuing probate bonds: A.A. Dority. They told me that the Dority Agency in downtown Boston had been around forever and knew everything about probate bonds. It was good advice.
Last summer, the façade of my home in Boston needed repair. I had to obtain a permit for my local contractor to put up staging on the City of Boston’s sidewalk. At City Hall, I found out that I also needed a permit bond for the permit to issue. Again, I was told that A.A. Dority around the corner from City Hall could provide the bond. And again, that was good advice.
In picking up my permit bond, I started talking with Crawford, part of the fifth generation at the agency, who told me a little about the history of the agency and its focus on surety business for the last 118 years. Since family-owned insurance agencies perpetuating themselves for over a century are especially interesting to Agency Checklists, I asked him if we could tell our readers a little bit more about A.A. Dority.
Thank you for taking the time for an interview about A.A. Dority.
No problem. Happy to do it.
What is the history of the agency and how has it stayed a family-owned business?
My great-great-grandfather started the agency in 1899, the year after he graduated from Harvard. He named his agency for himself, A.A. Dority: The “A. A.” standing for his names “Alfonso Augustus.” He focused on surety and fidelity bonds and the agency has followed his lead and stayed in the bond business ever since. In the 1920s, Alfonso Augustus invited his son-in-law, Bert Crawford, to work in the agency. Later, he turned the business over to him. Bert continued the tradition with his two sons, Ed and Whit Crawford, who joined the company in the 1940s and 1950s. Now my father, Phil Crawford, and my uncle, Richard Crawford, are the current owners of the business. They are the fourth generation. And I and my cousin, Jeff, are here now as the fifth generation.
You mentioned that your great-great-grandfather focused on surety and fidelity when he started the agency, but how has the agency been able to survive, and apparently thrive, based on surety business?
We always specialized in bonds. There was a time when the agency did a little bit of home and auto, mostly for family and friends. We still service some of those policies, but we do not promote that business or do anything new with it. Now, we just specialize full-time in bonds.
Are the bonds all produced by the agency’s direct writing or do you do any brokerage with independent agents?
A good percentage of our business is brokered. The agency has had relationships with some agencies to broker bonds for decades now. Some people just don’t want to get into the bonding side of it. They want nothing to do with this. We kind of act as the bond department for the agencies that don’t want to deal with it. We like to act as their bond department. We sell ourselves as they’re never going to lose a client because of us. We have the ability to get things done immediately. We have good relationships and work with a lot of the biggest surety markets in the country.
How many agencies or brokers do you presently do this for—acting as a practical matter as their bond department?
I would say 50 is a good number, but we act on an as-needed basis for many other brokers.
Are there questions you get from producers or people looking for bonds that make you have to explain surety to them?
Yes. A lot of times people don’t understand that a bond does not protect them. A lot of times people call up thinking that a bond is going to do something for them, when it is actually protecting a third party. That is one thing people are confused about often. They think it is something like, especially people appointed as a fiduciary in a probate case, the bond is somehow protecting them.
It is actually protecting the funds of the estate from them. A lot of people don’t understand on the contract side why surety companies want to look at financial statements. They don’t understand that it is not just, “I’m an excellent carpenter. I can do the work.” It is also that the bonding company wants to look at how you run the business side of things, and make sure you’re well off on the financial side, in case anything were to happen.
What is the type of bonds that you most write?
I would say we specialize mostly in probate. Probate is probably the largest thing we do. We are centered in downtown Boston and right around all the attorneys [doing probate]. Many of them come right into our office when they need something.
But, we do a lot of license and permit bonds and then we do a good amount of the performance and payment bonds on the contract side plus fidelity, public official, any kind of licensing permit [bonds].
Are there any bonds you do not write?
Really, we write any type of bond except for bail bonds. But they have gotten rid of those bonds in Massachusetts anyway. Even though we don’t write them, we still get calls for them quite often. We get a few calls a month on them. We have some people that are looking for a bail bondsmen because they have got a family member arrested. They look up our name and see bonds and think that is what it is. Also, occasionally we will get a bail bondsmen from out of state looking to get licensed here. They will call us asking what to do to get licensed. We have to tell them all that that doesn’t happen here anymore. The Bail Commissioner at the courthouse runs everything now [with cash bails instead of bail bonds].
What are the most unusual bond you see?
We have seen some unusual ones. When a divorced parent wants to take a child out of the country, we sometimes write a bond on that trip guaranteeing a penal sum that the parent will bring the child back.
That is a new one on me. What is that bond called?
It is called a “return of child bond.” The probate court will set the amount of the bond. Often times it is not too much. We see these bonds in penal sums of $20, 000, $30,000 or sometimes $50,000. But, we just had a bond we wrote, where a divorced mother taking her child to China and the probate court required a $100,000 bond before she could leave the country with the child. Those bonds are always fully collateralized. Also, when the person returns back with the child, they have to get a release from the other parent saying the child is back from the trip.
Are those bonds common?
No. We might see one of those a month. It is not something that is too common. But it is just one of the oddball bonds we write.
Another thing that we do are Massachusetts abandoned property bonds. The state will require a bond in some cases before turning over a duplicate security or check to replace one that has been lost. We also came out with a program that we set up with one our insurance companies to offer better rates on these bonds.
Why? What is the regular going rate?
It used to be 2% fixed penalty and 4% open penalty. Fixed penalty is when unclaimed shares have been converted to cash, and open penalty is when the property is still in the form of stock. We can now do 1% on fixed, and 2% on open. I don’t know if there is anybody out there offering 2% on open. We have done quite a few of these bonds lately for banks and insurance companies that have come to us directly. Some of these bonds have been over $1 million on an open penalty.
So, a $1 million unclaimed property bond on an open penalty would cost the principal $20,000 under your agency’s program rather than $40,000 under some other programs. That is not insignificant.
Do you have a website for applications or issuance?
We do have a website, but we don’t issue anything electronically. A lot of the time the bond needs to be an original document. We issue everything out of our office. A lot of people have the bonding companies issue it for them. We don’t have to wait for any of that. We have the ability to underwrite everything in- house, and get everything issued right out of our office.
What states do you write bonds in?
Massachusetts, as well as all the New England states, plus a number of other states including New York and California.
How can insurance professionals get in touch to learn more about A.A. Dority?
Contact us here:
A.A. Dority Company, Inc.
262 Washington St. Suite 99
Boston, MA 02108