Bonds

Bonds play an essential role in maintaining financial security and peace of mind for your business and other parties with whom it may have dealings. Customers and clients typically expect a certain level of reliability and consistency regarding your products and services, and failing to deliver as promised could incur significant financial consequences. Fortunately, bonds can help offset these losses and minimize hurdles for all parties.

What Is Bonds Insurance?

Although frequently referred to as a type of insurance, bonds generally function differently than your typical insurance policy. While insurance companies often sell these loss control instruments, they usually apply to only a single contract or job rather than providing ongoing coverage throughout a predetermined term as an insurance policy might. Still, while often functioning differently, bonds can provide similar levels of financial security for your business, providing a means to compensate other parties should unexpected incidents or circumstances disrupt your ability to deliver promised services.

What Does Bond Insurance Cover?

Bonds can typically provide compensation for financial losses accrued by clients, customers, the general public or other parties with whom your company may do business. These products can offer funds to help those affected by your business’s alleged shortcomings recoup costs, potentially limiting the need for lawsuits, which could have far-reaching financial and reputational consequences.

The exact functionality of bonds may vary. For example, surety bond companies typically sell bonds that establish an arrangement between three parties. The principal (e.g., your business) purchases surety bonds on behalf of the obligee (e.g., your client) from the surety (e.g., your insurance company). If you cannot deliver goods or services as promised, the bonds can be used to reimburse your client.

How Much Does Bond Insurance Cost?

The cost of bonds may vary depending on many factors, such as the following:

• Industry

• Location

• Type of bond

• Credit score

• Bond amount

Learn More

Contact Ski Enterprise LLC today to compare surety bond prices or learn more about these important products.