Bonds

Throughout the course of operating and growing your business, there may unfortunately be times when you come up short. Although such situations are certainly undesirable, as a responsible business owner, you must accept their inevitability. Fortunately, you can cushion the impact of these situations on your ongoing success and future potential by being prepared with appropriate loss control measures, such as bonds.

What Are Bonds?

Often sold by insurance companies, these financial tools can make all the difference in the aftermath of situations where your business fails to provide a suitable standard of work. Bonds may come in many forms, but their general purpose is to help your company and clients maintain financial security despite unexpected hardship. This can be critical, as an absence of appropriate bonds could leave your customers with no recourse other than to sue your business, potentially leading to catastrophic financial and reputational consequences.

Types of Bonds

Your business should work with a qualified insurance professional, such as those at Nicholas A. Consoles Insurance Agency, to discuss specific bond-related needs. These products may come in many forms, including commercial bonds, contract bonds, court bonds and license bonds. Still, while there may be many varieties, familiarizing yourself with the following overarching categories can help:

• Surety bonds establish an agreement between the following three parties:
  • The principal, such as your business
  • The obligee, such as your client
  • The surety, such as your insurance company

If the principal fails to deliver, the obligee can recoup their losses through the surety bonds without needing to file a lawsuit. The surety may then seek compensation from the principal.

• Fidelity bonds are also known as honesty bonds and may help offset losses arising from dishonest, criminal or fraudulent acts committed by your employees or contract workers. Specifically, these bonds may respond to the following incidents:
  • Burglary
  • Theft
  • Property damage
  • Forgery
  • Fraudulent transfer of funds

We’re Here to Help

Contact Nicholas A. Consoles Insurance Agency today to learn more and find the right bonds to secure your financial interests.