When businesses advertise that they are “bonded”, they could be referring to their surety or fidelity bonding. Fidelity bonds are an insurance product for your company, while surety bonds are insurance for the obligee (party requiring you to post the bond). Fidelity bonds work in the same way as property and casualty insurance that most are familiar with. However, surety bonding is quite different, as you are expected to reimburse the surety for claims.
Many occupations require you to obtain a license to operate your business. At times, a surety bond is required to guarantee that you follow the rules of the license, e.g. a contractor license bond or auto dealer bond. Should you break them, a claim could be filed on your bond.
Not all business licenses require a surety bond to be posted. To see if yours does, you can search the surety bond requirements by state. If your industry does not require a license bond, you can always obtain fidelity bond coverage to protect your clients from your employees stealing from them. This will still allow you to provide the peace of mind your clients are looking for when you tell them you are licensed and bonded.
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Reach out to one of our trusted insurance advisors today. We will help find you the right business bond insurance. You are under no obligation, we just want to give you some friendly advice.
