Bonded insurance what is it

Without bonding, there would be no such possibility for a hiring customer. One of the most popular of all sureties is the license and permit bond. This type of bond is often required by states as a pre-condition to obtaining a license to operate in that state, and it offers significant assistance to the general public in situations where they might need the services of a professional.

When hiring an electrician, for example, it would be prudent to select a professional having a license and permit bond, because that bond requires a certain level of training and study on the part of the professional, so any customer could be sure of at least some level of expertise. Another very popular type of bond is the fidelity bond. A business wishing to protect itself against employee theft, embezzlement, or fraud, can purchase this kind of bond so it can be compensated if any of those eventualities should take place as a result of employee actions.

ERISA bonds are also important. While the company may not be fully reimbursed for losses, it would at least recover partial value from any kind of employee malfeasance. The industries most commonly requiring contractors to be bonded are the construction industry, government agencies, janitorial services bond , and temporary staffing companies.

Of these, the two biggest users of surety bonds are government organizations and the sprawling construction industry in this country. We have an awesome Lottery bonds program if you sell lotto tickets. Surety bonds ensure that a project will be finished and are widely used in the construction industry. Liability insurance covers damage, injuries and other problems that small businesses can face while providing service. In many cases, a small business may need to be both bonded and carry liability insurance.

While both come with costs, the protections they provide to customers lets businesses that have these insurance policies charge higher rates. There are several types of bonding insurance. Without the right bonds you may not get business from certain people.

Some bonds you pay with premiums. Other bonds are paid as a percentage of the coverage amount that you want. Fidelity bonds are paid this way and usually cost 0. This percentage is paid as an annual premium. The Small Business Administration will often guarantee surety bonds in an effort to help small businesses compete for work.

So check with the Small Business Administration when taking out a surety bond. This insurance pays the medical bills and lost wages for employees who get sick or injured as a direct result of their jobs.

It is required by law in many states. Lucy Lazarony is a personal finance writer and journalist. Prior to freelance writing, she worked as a staff writer for Bankrate for seven years. She earned a bachelor's degree in journalism from the University of Florida and spent a summer as an international intern at Richmond, The American University in London. She lives in South Florida. Select Region. United States. A fidelity bond policyholders from fraudulent acts. As a business owner, you would take out a fidelity bond to insure your business from potential fraudulent acts committed by your employees.

This can include theft or damages. The cost of getting bonded and insured varies. Some types of bonds are paid in premiums. Others, like a fidelity bond, are typically paid as a percentage of the coverage sum you want, usually around 0. This also applies for contract bonds. This is an excellent question. For most professions, whether or not to get small business bonds is up to you. However, it is common for construction businesses to have bond coverage, general liability insurance and workers' compensation before being approved for a project or professional license.

In some cases, it's required by law. Next Insurance specializes in business insurance for small businesses and self-employed workers. We offer a painless and seamless online process for finding insurance for thousands of types of small businesses.