What businesses should know about getting bonded.
In today's business world, the importance of being bonded cannot be overstated. Many businesses are fueled by contracts, and surety bonds present an avenue for the proper implementation of those contracts. The phrase €œlicensed, bonded, and insured€ appears frequently in business advertising, but what does it mean? While most people know what business licenses and insurance are, the €œbonded€ part of the phrase tends to be unfamiliar to most. In short, being bonded means that ta business has purchased a surety bond.
Sometimes, a bond is required for a business to begin operating. Surety bonds are a business's way of reassuring customers that they stand behind their promises. If the business doesn't, the consumers will be protected as the bond can provide reimbursement.
Bonds protect consumers from harmful and unethical business practices. For example, a business owner who purchases a surety bond does not plan to use it. If a customer files a $4,000 claim against the owner's $25,000 bond and the claim is proven, then the surety company will pay the claim. However, the owner will need to reimburse the surety for the full $4,000 claim. As such, it's in the bond holder's best interest to honor the terms of their bond so that they don't end up repaying it.
Keep in mind that being bonded is different from being insured. While insurance policies are in place to protect the policyholder, surety bonds protect the bond holder's clients.
Ready to get started on your reliable business insurance
Bell Black Insurance. Serving Idaho Falls, Island Park, Driggs, Victor, Swan Valley, Ashton, and the neighboring communities in Idaho, as well as Jackson and Star Valley in Wyoming; we are ready to get you covered today.