Bonds

Bonds can make up a core pillar of your business’s ongoing financial security. These loss control tools are typically sold by insurance companies and can establish a way to compensate other parties if they experience financial losses for which you are at fault. However, while bonds are important, they can also be misunderstood. This makes it necessary to work with qualified professionals, such as those at the Rock Insurance Agency, to ensure you understand your options and needs.

What Are Commercial Bonds?

Also known as commercial surety bonds and business bonds, these products can serve as recourse for clients or the general public should your company be found to have violated industry regulations or the terms of contracts. Commercial bonds are often required by states and local jurisdictions before your business will be permitted to conduct operations.

What Is the Difference Between Surety and Fidelity Bonds?

There are many different types of bonds, each tailored to specific situations or coverage needs. Two of the most common forms that your business may wish to consider are surety and fidelity bonds. Consider the following information to determine which may suit your business:

• Surety bonds establish an agreement among the following three parties:
  • The principal, such as a business or contractor, purchases bonds.
  • The obligee, such as a client or developer, determines if bonds are needed.
  • The surety, such as an insurance company, underwrites and maintains the bonds.

If the principal fails to complete their obligations, the surety bonds they’ve purchased can help reimburse the obligee for their losses while avoiding the need for lawsuits.

• Fidelity bonds, also known as honesty bonds, are often needed if your business has access to other parties’ property and assets, such as if you dispatch staff to their location. These products can help compensate clients and others should your employees commit dishonest, criminal or fraudulent acts, such as the following:
  • Theft
  • Burglary
  • Forgery
  • Property damage
  • Illicit transfers of funds

Learn More 

Since 1962, the Rock Insurance Agency has helped insure businesses and families in the Barton, VT, area. Contact us today to learn more about bonds.