Bonds

Implementing and maintaining appropriate loss control measures can make all the difference for your business after various accidents, errors or other unforeseen circumstances. In many cases, bonds may play a critical role in your company’s ability to absorb and recover from the financial ramifications of such situations.

What Is Bond Insurance for a Business?

Your business should first understand that while the term “bond insurance” may be common, it can also be somewhat misleading. While both types of loss control measures may provide financial security in the face of potentially catastrophic out-of-pocket costs, bonds are not technically a type of insurance. While insurance usually includes ongoing coverage throughout the duration of a policy, bonds typically provide financial protection from possible mishaps and shortcomings related to a specific project or contract.

What Do Bonds Cover?

Bonds generally provide financial protection for you and your clients or customers. Purchasing appropriate bonds can guarantee a way for other parties to recoup potential losses for which your business is at fault. While there are several types of bonds, many of the most common fall under the following classifications:

• Surety bonds are often required if your business agrees to complete a project or provide services to a client. These bonds are generally purchased from and maintained by an insurance company. If your company is eventually unable to complete its responsibilities, clients can recoup their losses via the bonds, at which time the insurance company may pursue compensation from your business.
• Fidelity bonds are frequently needed if your company’s employees regularly have access to customers’ property or sensitive information. These products, also known as honesty bonds, can render financial assistance if employees, including contracted workers, commit dishonest, criminal or fraudulent acts that impact clients, such as theft, forgery and burglary.

We’re Here to Help

At JES Tax and Insurance, we understand that bonds can be a complicated and even intimidating subject. However, we also know that these loss control measures may be essential for protecting your business’s finances and reputation. Contact us today to analyze your needs, explore your options, and secure appropriate bonds.