Getting Bonded and Insured: Do You Require a Bond Insurance Coverage?

Getting Bonded and Insured: Do You Require a Bond Insurance Coverage?

What Is the Exact Meaning of the Term “Bonded”?

When you’re bonded, it means that you’ve purchased a bond in Astoria that guarantees compensation to your clients if your work doesn’t satisfy the contractual agreement. This type of insurance can also pay government agencies if contractors default on their contractual obligations.

What Does “Being Insured” Exactly Mean?

A third-party (your insurer) makes the payment when a covered claim is filed against your company when you’re insured.

What Is the Basic Difference Between a Bond and Insurance?

Businesses, such as contractors, may purchase insurance policies to protect them against financial loss if a covered event occurs. However, when you purchase a bond, you’re investing in the protection of your clients in case you don’t complete the work as per the contract terms. Also, you have to pay back the bond provider if there’s a claim made against a bond.

What Is the Importance of Insurance and Bonds?

Typically, commercial insurance policies can cover your properties against loss or damage and settle third-party liability claims against your company. Bonds protect your clients, giving them peace of mind. Also, bonds may be required to license certain specialty operations. Insurance and bonds are both essential investments in the business.

When Should You Purchase a Bond, Insurance, or Both?

Most businesses, large or small, need insurance to avoid major financial losses, such as due to theft, third-party injury claims, or property damage. You may obtain an optional fidelity bond as an additional safeguard against employee theft. Nonetheless, some types of bonds are mandatory, such as:

  • An obligee like a government agency may require a contractor to get bonded before licensing their company.
  • You may need a bond to bid successfully for contractual work.

How Should You Choose the Right Bond?

Your line of work and bonding objectives should determine the right type of bond for your company or situation. For specific bond applications, you may consult your surety bond provider.

How Do You Obtain a Surety Bond in Astoria?

You can get your surety bond from a local agency specializing in these solutions. You can also check with an insurance agency with a fully-fledged bond department.

How Should You Get Licensed and Bonded?

You’d need a surety bond to get licensed in some industries or specialties. However, bonding and licensing don’t apply to your profession if you can legally practice without a license.

Typically, Exactly How Much Does a Bond Cost?

The cost of a surety bond varies by many factors. To determine the right bond price for you, an underwriter will first evaluate your probability of triggering a claim. Speak with a licensed surety bond company to get an appropriate estimate for your line of work and unique needs.

What Are the Different Types of Fidelity Bonds Available?

There are different types of fidelity bonds to protect your business. Your coverage needs will determine which one is right for your company. You may need several fidelity bonds, such as:

  • An employee dishonesty bond: This insurance can protect your business against theft of funds or damage caused by a staff member.
  • Specialty bond: There are fidelity coverage options for certain specialties. For example, a janitorial bond can compensate clients, such as homeowners or businesses, in the event of theft.
  • ERISA bonds: Businesses require these fidelity bonds to protect employee benefit plans.

In some industries, optional surety bonds offer extra financial protections. In others, getting bonded is a prerequisite for licensing or winning contract bids. Looking for bond insurance in Astoria? To learn more about surety bonds, contact us at 01 Insurance today. We can help you obtain customized coverage for your unique business needs.