Business Bonding Insurance Basics
Tips on gaining a better understanding on business bonding insurance basicsLearning about business bonding insurance basics can help you protect your company’s reputation. Business bonding insurance provides protection for employers in the event of loss of property or money due to employee wrongdoing. In short, business bonding guarantees that a customer will receive his or her goods or services regardless of the acts of the company’s employees.
Typically, small business owners will obtain business bonded insurance to provide protection in the event service employees or contractors steal from the home or office of customers. If this occurs, a company insured by bond insurance will be covered if the employee is convicted of theft. Consider the following tips to help you gain a better understanding of business bonding insurance basics:
- Research state insurance and bonding guidelines.
- Learn about the primary types of small business bonding insurance policies.
- Evaluate which risks are covered by business bond insurance.
Learn more about state regulations for business bonding insurance
Department of Consumer Affairs to learn more about requirements for bonding a business. You can learn about individual state requirements by visiting state websites. For example, learn about Michigan bonding insurance requirements by visiting the State of Michigan website.
Determine if you need business bonding servicesBonding a business provides protection for the customer and demonstrates to the customer that you're willing to stand by your work. There are various types of bonds available including a license, payment, indemnity, bid and performance bond. Each of these bonds provides a specific customer guarantee. Many customers won't conduct business with a company unless the company is bonded. It's important to note that bonding companies will typically only allow you to carry coverage for which you can cover with your current liquid assets.
Assess risks insured by bonding a businessBusiness bonding insurance covers employers for acts of theft, forgery, embezzlement and larceny committed by employees. Bonding a business doesn't cover liability due to work accidents, job injuries or poor workmanship.
- Bond insurance is often confused by business insurance policies which cover property and liability risks. Business bonding insurance won't cover property damage or personal liability claims. It's best to discuss your bonding insurance coverage options with a licensed insurance agent who specializes in bonded insurance for your specific business type.
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