Bonds

Bonds

Surety bonds are different than insurance, but often equally important in guaranteeing financial security for your business. Surety bonds help ensure that a principal acts honestly and with integrity, maintains financial responsibility, and complies with laws and contracts. Our portfolio of surety bonds includes contract bonds, commercial bonds, court bonds and fidelity bonds.

Ensure a Contractor can Fulfill the Statement of Work: Contract Bonds

Contract bonding includes background checks and review of CPA-prepared financial records provided by the contractor and/or owner(s) for both business and personal assets. Contract Bonds, a category which includes Bid Bonds, Performance Bonds, Payment Bonds and Maintenance Bonds, guarantee that if a bid is awarded the contractor will enter into and fulfill the terms of the contract, including completing all work to specifications and paying for all outlined labor and materials.

Protect Your Business from Losses due to a Court Decision: Court Bonds

Court Bonds are also known as Judicial or Court Surety Bonds. They may cover the costs of making an appeal (Cost Bonds), buffer a sheriff or marshal if a suit is brought by someone whose property is seized, pay damages suffered by the plaintiff if a case goes to the defendant (Plaintiff’s Bonds, Attachment Bonds) or guarantee that seized property will remain in the same condition and will not be sold or disposed of (Replevin Bonds).
Probate or Fiduciary Bonds protect interested parties against loss due to failure of the fiduciary (i.e. an Executor, Guardian, Administrator or Conservator) to properly perform their lawful duties and obligations while administering an estate or managing assets for a minor or incapacitated person.

Protect against Employee Theft: Fidelity Bonds

Employee theft does occur, despite background checks and supervision. Fidelity Bonds cover employee theft occurring in both your and your customer’s businesses. Fidelity bonds are important when one or more employees is trusted with handling cash or other high worth assets.

  • Business services bonds cover the loss of a customer’s money, equipment, supplies and personal belongings through theft or other dishonest acts by your employees while on the customer’s premises. Business services bonds work well for cleaning services, contractors, pet caregivers and house sitters.
  • Standard employee dishonesty bonds protect your business from financial loss due to fraudulent activities by an employee, like taking money or securities. Non-profit organizations and professional offices including CPAs, dentists and physicians are good candidates for employee dishonesty bonds.
  • The Employee Retirement Income Security Act of 1974 (ERISA) requires trustees of pension plans to have fidelity bond coverage equal to at least 10% of the total plan’s assets. ERISA bonds protect participants and beneficiaries from dishonest acts of a fiduciary who handles employee benefit or pension plans, including 401(k)s.

Ensure Contractors Follow Governmental Regulations: Commercial Surety Bonds

Generally required by state laws and statutes, commercial surety bonds guarantee some aspect of a principal’s occupation. Commercial surety bonds are extremely industry specific:

  • Agricultural dealer bonds (AG bonds): required if licensed with the Department of Agriculture to buy and resell agriculture products (grain dealer bonds, hay dealer bonds, livestock dealer bonds, milk dealer bonds and produce dealer bonds).
  • ARC bonds: required by the Airlines Reporting Corporation to guarantee that payment collected by a travel agency will be forwarded to the appropriate airline.
  • Auctioneer bonds: required by auctioneers and auction houses to protect bids and purchases.
  • Auto dealer bonds, or motor vehicle dealer (MVD) bonds: assure the general public (specifically those who have financial transactions with the dealer) that the dealer will comply with the law. Similar dealer bonds: boat dealer bonds, mobile home dealer bonds, motorcycle dealer bonds, snowmobile dealer bonds and vessel dealer bonds.
  • Fuel tax bonds: required by fuel sellers to guarantee payment of taxes.
  • Liquor bonds: guarantee compliance with federal and state laws pertaining to the sale, manufacturing and warehousing of alcohol.
  • Lottery bonds: required for any establishment with a lottery machine to guarantee proper use of the machine and avoid abuse to the state lottery.
  • Notary public bonds: required by state statutes. Protect against losses from improper actions by notaries.
  • Motorcycle dealer bonds: guarantee that motorcycle dealers comply with laws, tax payments and, in some cases, payment of judgments. Required to protect the public from wrongful actions of the dealer.
  • Mortgage broker bonds: guarantee that mortgage brokers will abide by state laws, rules and regulations under the mortgage broker license code.
  • Public official bonds: guarantee faithful performance of official duties, generally for the protection of taxpayers.
  • Title bonds: required to register a vehicle or other property due to a lost or defective title. Also known as certificate of title bonds, defective title bonds and lost title bonds.
  • Utility bonds: financial guarantee bonds to ensure payment of utility bills.
  • Warehouse bonds: guarantee that goods stored in a warehouse will be delivered on presentation of a receipt.
  • License and permit bonds: required by federal, state or municipal governments before they will grant a license or permit to conduct business in certain occupations or professions. For example: contractor license bonds, electrician bonds, HVAC commercial bonds, non-resident license bonds, plumber bonds.

For more information on bonds for your business, connect with one of our experienced SP Business Insurance agents by calling or texting us at: 480-941-7979. We look forward to doing business with you soon!