Businesses will sometimes indicate that they are “bonded and insured,” but what does being bonded and insured mean exactly? And does it matter if a business is bonded and insured?
The answers to these questions are important to small businesses and their clients!
The small business insurance that biBERK provides protects your business from the many types of risks you face every day—risks that can create unbearable financial burdens in some cases.
Specifically, we offer:
These policies provide important financial protection, and also powerful peace of mind. However, in some situations, a client or customer may also require that a business purchase what are called surety bonds before a project begins.
These bonds provide financial protection specific to claims of work that is poorly executed or incomplete, as well as allegations of fraud or theft—all issues that business insurance does not cover. There are three parties to a surety bond:
Three of the more common types of bonds are:
Bonds can be required in a wide variety of industries, but they’re particularly common in construction. The way they work in that industry is that the client requires a contractor to purchase a surety bond. Then if, for example, the contractor fails to complete the project, the client can file a claim with the surety company to be compensated for the cost of finding and hiring another contractor to complete the work.
Companies wondering about how to get bonded and insured will be glad to learn that this can be done quickly and efficiently. You simply need to contact the surety company to purchase bonds and biBERK to buy the appropriate business insurance coverage.
As noted on the website of the U.S. Small Business Administration, “The Small Business Administration (SBA) guarantees bid, performance, and payment surety bonds issued by certain surety companies.” The agency does this to help small businesses compete for work more effectively. It’s important to keep this in mind if you operate a small company and need to be bonded.
As for insurance, you can get instant, online quotes from biBERK for the policies you need. After deciding on your coverages, you can also purchase policies online with coverage that starts soon after—typically within a day or two. Later, if you need to file a claim, you can do that and manage your policies online as well.
Once you’re insured and bonded as requested by your client, you can get to work confident that you won’t end up with a large financial burden if something unexpected occurs. And your client has similar confidence, knowing that steps have been taken to protect them financially.
Companies that choose not to be insured and bonded may miss out on business opportunities since some organizations will refuse to do business with those who don’t take these steps. Even if there aren’t strict requirements regarding your company getting bonded and insured, doing so can help build trust with your current or potential clients or customers.
In some scenarios, a company must be licensed, bonded, and insured. That simply means that the company is bonded, insurance has been purchased, and any relevant licenses have been obtained.
Being licensed means that you’ve met a set of requirements specified by the authorities for the type of work you do and where you do it. As a result of being granted a license, you have the right to conduct business in that location. Often, there are one or more tests you must pass to prove your competency in your field.
Requirements for being licensed, bonded, and insured are more common in technical professions, particularly those in which there is a risk of injury to people affected by the licensed company’s work, including the client and potentially the general public.
Ultimately, when a company is bonded and insured, it is reassuring both for them and for their clients. With the proper financial protection in place, both parties can focus on achieving a successful outcome for the project.
Learn more about small business insurance policies from biBERK today!