Commercial Bonds Insurance
Business Commercial Bonds Insurance help your business grow by strengthening your commitments with an agreement to pay if you can’t perform as promised. Bonds and insurance are similar in that both establish a contractual agreement to pay on your behalf when certain circumstances occur. Both are sold by insurance agents and underwritten by insurance companies. In other ways, Commercial Bonds Insurance more complicated than traditional commercial insurance policies.
- A bond is a three-party contract between a principal, surety, and obligee.
- As the Principal, your bond guarantees that your company will perform your contractual duties.
- The Obligee is an entity with whom you have a contractual agreement to perform duties as outlined.
- The Surety agrees to pay a bond “penalty” if your company can’t meet a bonded obligation.
- The Penalty is the maximum amount a bond will pay if you default on a contractual obligation.
An important part of your commercial insurance program
Commercial Bonds Insurance is an important part of your commercial insurance program. When your business qualifies for a bond, it’s often seen as a positive measure of your company’s reputation and financial standing, so it’s important to understand how they work.
If you are new to bonding, we can answer your questions. We will work with your accountant, help you complete the necessary forms and seek a reduced rate from your bond underwriter.
Types of Business Commercial Bonds
Major corporations and government entities often require bonds from the contractors or companies with whom they do business. Commercial Bonds fall within two general categories: surety and fidelity. The bonds within those two categories serve many purposes.
- Bid Bond – Required as a show of good faith that when you bid on a contract, you will properly perform your duties if your bid wins. Often there is no fee for a Bid Bond.
- Performance Bond –Pays when your company cannot fulfill a contractual obligation to perform a service, supply goods, or complete a construction job
- License & Permit Bond – Guarantees that, if granted a permit or license, your company will operate your business in compliance with state, federal, and local laws
- Guardianship Bond – Guarantees your fiduciary conduct and financial honesty as guardian or conservator to a minor or incapacitated adult
- Supply Bond – Pays when your company defaults on a contractual obligation to supply goods or materials
- Auto Dealer Bond –Guarantees your promise that your auto dealership will comply with state regulations.
- Fuel Tax Bond –Guarantees that your trucking or transportation operations will pay all fuel taxes due.
- Fidelity Bond – Covers losses incurred due to dishonest employees.
- ERISA Bond – Guarantees your honesty, proper execution of fiduciary responsibilities, and compliance with ERISA standards of conduct for an employee retirement fund.
“Have used Vince and his agency for many years for professional business needs and some consultation. Have always felt very comfortable with him, his agency and staff. All are very professional and conscientious with regard to their clients’ needs.”