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Murphy Insurance2024-05-09 12:43:532024-08-15 12:52:17Compliance Reminders for BusinessesBusiness Insurance Bonds, often referred to simply as surety bonds or commercial bonds, are a type of insurance product that protects a business from financial loss resulting from the failure of another party to fulfill their obligations. These bonds are a form of risk management tool used to guarantee performance or compliance with contractual obligations.
Bonds are important as a means of guaranteeing action or performance. They protect a third party in the event that the insured party fails to perform or complete an obligation. Often a business’ success depends on its ability to qualify for and provide bonds to its clients.
Bond Types for Different Business Needs
There are dozens of types of bonds available. Murphy Insurance has access to a complete array of bonds that are important for your business to be eligible for certain job opportunities and also that can protect your business from wrong doing. A partial list of bond types and descriptions is provided below. If you have a bond need not listed here, please contact us.
Contract Bonds
This type of bond, also known as a construction bond, guarantees the performance of obligations under a specific contract bond. This category of bonds includes but is not limited to:
- Bid Bonds – guarantee that low bidder on a project will perform the work at the specified price. If not, it pays the developer the difference between the low bid and the next lowest bid.
- Performance Bonds – guarantee fulfillment of the contract according to specified terms and specifications and provide funds to complete the project or a bond penalty in the event of contract default.
- Payment Bonds – guarantee payments for materials and labor on a project by providing funds if there is a default.
- Maintenance Bonds – guarantee that project work will be free from defects for a specific period of time.
- Supply Bonds – guarantee that a supplier will furnish materials or supplies as contracted and protects against loss if not met.
- Service Contract – guarantee a contractor will provide services as outlined in a contract and protects against loss if not met.
License & Permit Bonds
These types of bonds are required before granting a license or permit for engaging in a particular type of business. They are usually associated with activities or jobs that involve serious obligations. They guarantee proper action on the part of the business owner. License and permit bonds can be provided for dozens of purposes, including contractor licenses, broker bonds, dealer bonds, escrow bonds, etc.
Pension Trust/ERISA Bonds
This type of bond guarantees that individuals associated with managing a company’s pension, profit sharing or other retirement plan fulfill their fiduciary responsibility and protects the plan and invested funds from dishonesty and fraud.
Dishonesty/Fidelity Bonds
This type of bond protects employers against dishonest acts by employees. Notaries and public official bonds also fall under this category.
Financial Institution Bonds
This type of bond is designed to meet the unique needs of banks and financial institutions, including coverage for employee dishonesty, robbery, forgery, counterfeit, systems data fraud and other situations.
Court & Probate Bonds
These bonds can be required by courts during legal proceedings to protect from possible loss as the result of the outcome of a legal action.
Insurance Companies
At Murphy Insurance, we work with top rated insurance companies and compare options to find the best balance of cost and coverage that meets your needs.
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Murphy Insurance2024-05-09 12:43:532024-08-15 12:52:17Compliance Reminders for Businesses
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Murphy Insurance2024-04-23 09:00:552024-07-22 15:51:52Covering Losses with Business Interruption Insurance