Bonding Solutions
When you insure or provide Bonding for your company, it means that you have transferred a number of risks to a third party through an insurance product. There are many types of commercial insurance that can protect businesses from a variety of risks, but note that not every business needs every type of insurance.
Due to its uniqueness, no business is exactly the same, so naturally, every business tends to have a different set of needs when it comes to coverage. The bonding or insurance your business should purchase will depend a lot on your industry, the size of your company, and various risk factors that may or may not be unique to your business.
The best course of action would be to consult our experts who understand your industry and can help you find the right coverage and the best value.
Dashwood Bond Surety professionals use industry-leading technology to benchmark your policies against similar companies in your vertical, then procure quotes from multiple issuers for coverage you may not carry and might want to consider purchasing. We also cross-reference your costs with companies of comparable size, policy limits, claims history, and risk tolerance to make sure your premiums are as competitive as possible.
The Main Differences Between Insurance and Bonds
Bonds are frequently confused with insurance, but there are some major differences between the two. What they do have in common is that both provide forms of financial compensation in the event that a claim is made.
However, with a surety bond, the claim would be made against a surety company that issued the bond, but in the case of an insurance policy, the claim is made against that policy, which was issued by an insurance company. Additionally, you will be required to reimburse the surety for the amount paid on the claim.
The main difference is that insurance protects the business itself from losses while bonds protect the client that has hired the business for a specific job or project.
Why Your Business Should Become Bonded, and Insured
Being bonded, and insured may not be required in every situation, but it can provide significant benefits regardless.
In addition to offering a sense of security to your clients, having a business bonding can actually protect you in some situations as it can help you collect damages when a client refuses to pay.
Being bonded helps create trust between your business and your clients because you are giving them assurances that they will be financially protected from losses they may suffer if you don’t fulfill your contractual obligations to them completely. Bonds also protect your reputation if you are unable to meet your client’s expectations.
Being insured offers reassurances to companies and clients that are interested in working with you and shows that you are financially stable. If something goes wrong, having the right insurance coverage will protect your business from financial loss and allow you to overcome a variety of challenges while dealing with these problems that might hinder your ability to provide your services to clients.
Clients and businesses want to work with companies that are secure, not with companies that could go bankrupt as the result of a liability lawsuit. Managing the risk involved in your business operations and transferring that risk to your insurers is an important aspect in securing the future of your business.
How Much Does It Cost to get a Bond, and Insured?
The cost of getting bonded will vary depending on your business’s location(s), your industry, and the type of operation your business is running.
The cost drivers for insurance will change based on the policies you choose, the unique risks your business faces, the value of your property, the size and revenue of your business, and other key factors.
The price of bonding will depend on the conditions of the agreement or contract that the bond is going to cover. Surety bonds are more similar to loans than insurance policies and the main factor that is taken into consideration when determining premiums is your company’s credit score and financials. Businesses that have a good credit score can expect to pay 1-5{5588860d50ce4a3c90d87bc8fa33e4949bb0fe024eea764f8cab97c5503dd563} of the bond amount but this can go up to 20{5588860d50ce4a3c90d87bc8fa33e4949bb0fe024eea764f8cab97c5503dd563} for companies with poor credit scores.
Conclusion
Now that you have a better understanding of what it means to be bonded and insured, you may be wondering how all of this affects your business and where to go from here.
Take a look at some of the Bonds we provide: