What does it mean to have your business be bonded?
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Asked February 2, 2016
Being bonded is a good way for a business to guarantee their performance to their customers. It is not unusual for a company which hires your services to require you to be bonded because it protects them against, loss or theft by you or your employees. For example, businesses that contract with a bank may have to be bonded before they can get the contract.
In general, being bonded means that you are covered for certain types of liability, usually financial in nature, for the amount of the bond. Even though it is similar to liability insurance, the two should not be confused and you may be required to have both in order to work in certain places or under special circumstances.
A general business bond is the most common type, and can be used for many types of businesses. Even if your clients do not require you to be bonded, doing so can still be a huge benefit in securing new business ventures. For example, pet walkers may not be required to be bonded, but doing so offers a great deal of confidence for your potential customers.
Bonding rates are usually inexpensive, and cover you for a specific maximum number of employees. In most cases, you can be bonded for around 1% of the bond coverage, although actual rates and costs will vary by issuer, type of bond, and conditions for the bond. Instant bonding is available either online or through your existing insurance provider.
Being bonded does not negate any other insurance requirements. Even though being bonded covers you for certain types of liability, it does not replace the full coverage available through traditional business liability coverage, including property damage or work defects.
Answered February 5, 2016 by Anonymous