Bonds

While traditional insurance is designed to compensate the insured party against unforeseen losses, a surety bond is an agreement that provides monetary compensation to a third party (obligee) if the insured party (principal) fails to perform specific acts within a stated period.

 

Working with an independent insurance agent is the best way to evaluate the bond needs for any business.

 

Here’s more information about the types of bonds available:

 

Contract Performance and Payment Bonds – A contract bond guarantees the performance of a contractor, while a payment bond guarantees that bills incurred by a contractor for labor and materials will be paid in accordance with the terms of the contract.

 

License and Permit Bonds – These are bonds, required by federal, state, and local municipalities, that guarantee performance of the laws, regulations, or ordinances relating to what’s covered by the license or permit.

 

Miscellaneous Bonds – Miscellaneous bonds are those that don’t fit well under the other commercial surety bond classifications. They often support private relationships and unique business needs.

 

Court and Fiduciary Bonds – These bonds guarantee a person or organization will faithfully perform certain duties prescribed by law or the courts, or they demonstrate financial responsibility for another’s benefit until the final outcome of the court’s decision.

 

Public Official Bond – This bond guarantees the faithful performance of the duties of a public official and an honest accounting of all the public funds handled by that person.

 

SBA Bond Guarantee Program – The U.S. Small Business Administration’s (SBA) Surety Bond Guarantee Program, with cooperation from the surety industry, helps small construction companies obtain required bonds on federal, state, local, and commercial construction projects and on service and supply contracts and subcontracts. Small and emerging contractors grow by increasing contracting opportunities, especially in public sector construction.

 

Notary Bonds – Notary bonds protect the consumer or individual receiving the bond from any errors or omissions made by a notary public. This bond also ensures against any unethical behavior or dishonesty on the part of a notary public during the course of business.

 

ERISA Bonds – In 1974, the U.S. Employee Retirement Income Security Act (ERISA) was enacted to regulate most types of employee benefit plans. The ERISA bond is required to protect the participants and beneficiaries from dishonest acts of the person(s) who handles the plan assets.

 

Business Service Bonds – Business service bonds protect a business from any loss incurred from dishonest acts by the employees against clients and customers.

 

Labor Union Wage and Fringe Benefit Bonds – Guarantees payment of wages to any and all union members furnished to a contractor (principal) by the union (obligee), and/or payment to the union’s fringe benefits fund of all sums required of the contractor.

 

Commercial Crime Bonds – This includes a blanket fidelity bond issued in a stated amount on all regular employees of commercial establishments covering against loss from employees’ dishonest acts and/or a forgery bond which protects against loss from forgery or alteration of instruments such as checks, drafts, or notes.

 

Concealed Carry Criminal Defense Reimbursement Bond – As a permit holder of a legally possessed weapon, the bond provides for the reasonable legal fees, expenses, and costs of defense up to the maximum bond limit chosen, after declaration from the prosecuting attorney that no criminal charges will be filed, a dismissal of all filed criminal charges, or acquittal of the “permit holder” following a trial and verdict is upheld on appeal.