Bonds

Businesses may find several benefits from carrying bonds. Bonds can help build trust with clients, and they may be required before obtaining certain licenses and permits.

Two common types of bonds are surety bonds and fidelity bonds. Surety bonds provide guarantees that a business will follow through on contractual obligations or adhere to applicable regulations, and fidelity bonds insure businesses against employees’ dishonest acts.

The experienced team at Texas Insurance Options in Dallas, Texas, can help your company get the bonds that fit your needs. Contact us today to get started

Surety Bonds

A surety bond is a contractual agreement among three parties:

·        The principal (e.g., a business) is the party that purchases the surety bond.

·        The obligee is the governmental or private party that requires the principal to purchase a surety bond.

·        The surety (e.g., an insurance company) is the party that underwrites and maintains the bond.

How Do Surety Bonds Work?

If a principal does not meet the surety bond’s terms, an obligee may file a claim against it. If the claim is valid and the principal doesn’t remedy the issue, the surety company will provide financial compensation to the obligee up to the bond amount. The surety company will then typically seek repayment from the principal for that amount.

What Are Types of Surety Bonds?

There are numerous types of surety bonds, including contract surety bonds and commercial surety bonds.

Contract Surety Bonds

Contract surety bonds provide assurances that businesses will fulfill the obligations of a contract. Clients may require them before work can start on specific projects. Examples of contract surety bonds include the following:

·        Bid bonds

·        Performance bonds

·        Maintenance bonds or warranty bonds

·        Payment bonds

·        Supply bonds

Commercial Surety Bonds

Commercial surety bonds generally provide assurances that a business will comply with specific regulations or requirements. For example, license and permit bonds provide guarantees that a business will adhere to laws applicable to their industry, and a governmental entity may require them before granting a business a license or permit.

Other types of surety bonds may be available. Contact our agents for details.

Fidelity Bonds

Fidelity bonds may also be referred to as employee dishonesty insurance. They can help cover a business’s financial losses after employees’ dishonest acts, such as:

·        Theft

·        Fraud

·        Forgery

·        Embezzlement

Fidelity bond coverage for other wrongful acts may be available, as well as coverage for dishonest acts committed by volunteers or contract workers. Reach out to our agents for details on terms and exclusions.

Contact Us

The team at Texas Insurance Options can help your operations secure the bonds that best address your needs. Contact us today for more information.