For many, bonds are a necessary part of doing business. But for many more, they are quite confusing. Not all businesses need bonds. Johl & Company is here to help you determine whether or not your business needs bonds and which types of bonds will meet your needs best.
What Types of Businesses Need Bonds?
There are many different types of bonds for business. So many, in fact, that businesses in almost any industry may find themselves in needs of bonds at one time or another.
Bonds do things like guarantee payments for things like sales tax or utility bills, guarantee the timely completion of work, or help to receive permission to work in a specific area or location.
In other words, all kinds of businesses need bonds. While most commonly associated with contract workers, electricians, plumbers, etc. grants may be needed by businesses that have loans, need permits, or simply have discerning clientele who prefer the surety bonds provide them with.
What Types of Bonds are Available?
There are multitude of bonds that are available to businesses today. Depending on the nature of your business, you may need one or more of the following types of bonds.
- Performance Bonds
- Bid Bonds
- Payment Bonds
- Commercial Surety Bonds
- Indemnity Bonds
- License Ponds
- Permit Bonds
- Fidelity Bonds
Among these, fidelity bonds are somewhat unique in that they protect the business from certain dishonest acts of employees. These acts may include things like embezzlement or intentionally causing financial or legal losses. They also protect businesses when an employee’s incompetence causes these types of losses.
Commercial surety bonds, as another example, provide assurances that the contractor will follow certain governmental rules and regulations when building structures or risk substantial financial losses for failing to do so.
For the most part, bonds are about providing assurances. Some of these assurances are to the person purchasing the finished product, some have to deal with government and municipal regulations, and others are for the sake of the business itself.
Why Buy Bonds?
The truth is that bonds are simply the price of doing business in some industries. The construction industry is built, if you’ll pardon the pun, on bonds. Bonds insure that certain contractors will complete their parts of the project by a specific time so that the project can continue on schedule. The general contractor may have a bond guaranteeing completion by a certain date. He, likely, has bonds guaranteeing compliance with regulatory concerns, and may have other bonds as well.
Bonds lend legitimacy to the transaction, ensure payment, and protect businesses. Sometimes bonds are required as a show of good faith and at other times they are requested as a sign of your honorable intentions with the project.
Why Johl & Company?
Johl & Company has served the insurance needs of New Jersey home and business owners, in addition to surrounding cities and states, since 1963. We take great pride in our personal service as well as our reputation for only selling you the insurance products and services that are right for you.
We take the time to offer wise counsel on your needs for business insurance, surety bonds, risk management, and more. We believe in guiding you through the claims process to seek a fast and fair resolution. It is these beliefs that has served us well over the years and the reason we receive such positive reviews from our customers, past and present.