Surety and Fidelity Bonds: Extra Protection When You Need It
In the world of commercial insurance, surety and fidelity bonds are designed to help protect your company during business transactions. Sometimes, bonds are required by law before your company can perform certain transactions. At Hillegass, Wilson and Cowan, Inc., our insurance agents can help you understand each type of bond and determine when – and if – they are required for your business. We serve business clients of all sizes in Ponte Vedra Beach, FL, and surrounding areas. Contact us with your questions and to get a free quote for all your commercial insurance needs.
A surety bond is called such because it is backed by a party known as a surety or guarantor. This type of bond provides insurance that one party will complete or fulfill an obligation to another party. Essentially, a surety bond will back your business agreement with guaranteed funding in the event of default. You, as the business owner, are the principal. The company that provides the bond is the surety. And finally, the obligee is the third party that requires that a bond is provided before the agreement can continue.
A surety bond stipulates that if the principal fails to complete the work or agreement that has been agreed upon, the surety will be responsible for the financial losses accrued by the obligee. In exchange for the backup offered by a surety, the principal pays a fee to the surety.
This type of insurance alternative comes up often for contractors, who make a contractual obligation to complete a job and are backed by a guarantor. They also come up in some cases to get specific permits or are required by a court of law for one reason or another.
If you fail to complete the obligation you agreed to that required the bond, it is important to know that you will be held responsible by the surety to re-pay the company.
Unlike surety bonds, fidelity bonds are agreements between just two parties. This type of bond is an agreement between you and a backer that protects your business. At Hillegass, Wilson and Cowan, Inc., we provide fidelity bonds to protect clients from dishonest actions from their own employees.
Fidelity bonds cover damaging actions by employees that may not be covered under traditional property insurance policies. Types of employee actions might include theft, forgery, embezzling or fraudulent trading.
A fidelity bond is an additional level of protection against one of the worst types of unexpected events: employee dishonesty. Our certified commercial insurance agents will evaluate your businesses’ needs and help you decide if this type of insurance applies for you.
We’re Your Partner in Protection
When you work with skilled insurance agents, you can get an affordable rate that protects your business without crippling it financially. Contact Hillegass, Wilson and Cowan, Inc., in Ponte Vedra today to start building a portfolio with surety and fidelity bonds and all your other commercial insurance needs.