When you purchase insurance, whether it be for your car, home, or business, you are buying a policy that will protect you in the event of an unforeseen accident or event. To qualify for coverage under most policies, you must be bonded. But what does bonded in insurance mean, and why is it important? Read on to learn more.
Two Types of Bonds in Insurance
Your business may obtain either type of bond, surety bond, or fidelity bond.
Surety bonds are a type of bond that guarantees the performance of a contract or the payment of a debt. They are often used in the construction industry, where they guarantee that contractors will complete their work on time and within budget.
If a contractor fails to meet their obligations, the surety company will pay for any damages that may result. Surety bonds also typically involve three parties – the surety, obligee, and principal.
The surety refers to the insurance provider, and the obligee is the entity that needs the bond for the Principal to conduct business. Occasionally, the obligee is a different business, as is the case when a subcontractor is employed by a general contractor.
The principal is both the business that will be paying for the bond and the entity that will be performing the services.
Fidelity bonds are a type of insurance that protects businesses from employee theft. The bond guarantees that employees will not steal money or property from the company. If they do, the insurance company will reimburse the business for any losses.
This type of bond is important for businesses that deal with large sums of money or valuable property, such as jewelry stores or banks. Therefore, a fidelity bond primarily serves to protect the client, but it also shields the company from negligent staff activity.
Why Your Business Should Be Bonded
There are a few key reasons why businesses should be bonded in insurance. First and foremost, it protects the company from employees who may steal money or property. It also provides coverage if the business is sued for negligence. At the same time, it guarantees that the company will meet its contractual obligations.
Not to mention, if your state or municipality mandates it, your business must be bonded. Additionally, you should consider being bonded to safeguard your clients and the viability of your business.
Who Can Help You Be Bonded in Insurance?
If you’re looking for bonded insurance for your business, there are a few key things to keep in mind. First and foremost, you’ll need to find an insurance provider that offers bonding services.
Not all providers offer this type of coverage, so be sure to ask around. You may also need to meet certain eligibility requirements to be bonded. For example, your business may need to be licensed and have a good credit score.
If you’re not sure whether or not you need bonded insurance, or if you’re not sure where to start, contact a qualified and reliable broker. They can help you assess your needs and find the right provider for your business.
One such example is Stone Claims Group, a well-known and highly-praised public insurance adjuster that specializes in complex commercial claims. Beyond that specialization, they can also help analyze your policy coverages and pick the best insurance bonded policy for your business. They can also help you document your claim, negotiate your claims with insurance companies, and may allow you to attain maximum claim settlement.