The success of your business hinges on delivering dependable and consistent products and services, earning your clients’ trust in the process. As your company expands, meeting these expectations becomes paramount. Having the capacity to compensate clients and mitigate potential financial and reputational damage is essential, which is where bonds are helpful.
Hammer Agency in Denver, CO, is here to help your business navigate its bond and bond insurance needs. Contact us today to get started.
How Does Bonds Insurance Differ From Other Types of Insurance?
Bonds reassure clients that they will be compensated if your organization cannot meet agreed-on expectations or obligations, such as contractual terms. On the contrary, a commercial insurance policy will only pay out for approved claims.
There are several types of bonds, but two of the most common in the United States are surety bonds and fidelity bonds, which provide the following:
- Surety bonds—These generally provide financial security within a contractual agreement. For example, if a property owner wants assurance about a construction project, they may require the firm they’ve hired to acquire surety bonds. Surety bonds may come in many forms, including bid bonds, performance bonds, payment bonds, warranty (maintenance) bonds, license and permit bonds, judicial or court bonds, fiduciary (probate) bonds, public official bonds and miscellaneous bonds.
- Fidelity bonds—Also known as honesty bonds, these bonds can help insulate your business from financial losses resulting from dishonest or fraudulent acts committed by your employees. They may also include coverage for contract workers’ actions. They can generally provide aid in response to theft, burglary, robbery, forgery, embezzlement, property destruction, fraudulent trading, unlawful data access and illicit fund transfers.
What Factors Affect the Cost of Bonds Insurance?
The cost of bonds may vary based on several criteria. Some factors that will affect the price of bonds include the type of bond, the bond amount requested, the applicant’s financial health, risk assessment, market conditions, indemnity agreement, location, and kind of obligee. Hammer Agency can further discuss factors influencing your business’s bond cost.
Learn More About Bonds
At Hammer Agency, we help your organization understand bonds and acquire suitable financial protection for yourself and your clients. Contact us today to get started.