Types of Bonds your Business will Need Explained
For any new business getting to grips with the different types of bonds available can be an intimidating process. Not only do you have to get your head around the bonds themselves but you also have to figure out which ones apply to you. So why don’t we make it a little simpler? The following is a list of some of the most common types of bonds:
- Fidelity Bond
If you have employees the first thing you’ll need is a fidelity bond. Fidelity bonds cover you in the case of employee dishonesty. Unfortunately we don’t always know our employees as well as we like to think, so fidelity bonds are a must. You can get a blanket fidelity bond which covers all your employees, or an individual fidelity bond. Individual fidelity bonds are useful when a particular employee has a lot of responsibility, for example a treasurer.
- Performance Bond
A performance bond is necessary for construction contracts. Sometimes contractors go bankrupt and are unable to complete a project. A performance bond ensures that the party offering the contract will not incur any financial loss in the event of such a failure. Similar types of bonds include payment bonds and maintenance bonds.
- License bond
If your business requires any kind of special license, for example a liquor license, you will need a license bond. The license bond protects your business in case some condition related to the license is abused. For example if you own a liquor store and your employees serve liquor to minors, a license bond could cover some of the loss involved.
Read more about this Article in: <a href=”http://www.performancebondinsurance.com/“>Performance</a>
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