Bonds, which may be required for your business, can provide business benefits to you and help you build client trust. If you’re in need of a bond, the team at Sanguinetti & Co. Insurance Brokers is here to help. Contact us today to discuss your business’s bonds needs.
What Are the Two Types of Bonds?
Businesses may need two common types of bonds: surety bonds and fidelity bonds. Surety bonds provide assurances that you will fulfill your contract or follow applicable regulations, and fidelity bonds insure against your workers’ dishonest acts.
Fidelity bonds are a type of business insurance that may protect against specific dishonest acts. Two kinds of fidelity bonds include:
- First-party fidelity bonds, which may cover acts of employee dishonesty (e.g., fraud, forgery, and theft).
- Third-party fidelity bonds, which may provide coverage for dishonest acts by individuals working for your business on a contract basis.
Surety bonds are an agreement among three parties:
- The principal is the party that buys the surety bond.
- The obligee is a private or governmental party that requires the principal to secure a bond.
- The surety is the entity, such as an insurance company, that underwrites the surety bone.
The obligee may file a claim against the bond if a principal doesn’t adhere to the surety bond’s terms. Then, if the situation cannot be remedied with the principal, the surety may provide financial compensation to the obligee. If that occurs, the surety will typically seek reimbursement from the principal for that payment.
How to Get Bonds for Your Business
Sanguinetti & Co. Insurance Brokers is here to help you navigate your business bonds needs. Contact us today to get started.