Bonds in Placerville, California

Clients, customers and partners with whom you enter into business agreements rely on you to provide dependable and timely services, and failing to do so could adversely impact all parties involved. Fortunately, bonds can provide crucial financial protection in these difficult situations.

What Is a Bond?

Bonds are financial loss control products and are often sold by insurance companies. They may be required by clients and customers seeking financial security and peace of mind before entering into a contractual agreement with your company. While they may sometimes be referred to as bonds insurance, your organization should understand that bonds typically do not function the same as traditional insurance policies and should not be considered synonymous.

How Do Bonds Work?

In most cases, bonds are purchased to establish a means for your clients or customers to recoup potential losses from errors, accidents or other shortcomings involving your services. Again, bonds differ from traditional insurance offerings. Bonds are typically purchased for a job or contract, while insurance policies often establish ongoing financial protection for various risks and exposures.

Types of Bonds

The exact functionality of bonds may vary depending on the type and requirements for specific business arrangements. Still, while these loss control tools can come in many forms, most subsets utilized by U.S. businesses can be classified as one of the following:

• Surety bonds—These bonds, which may also be referred to as surety bond insurance, represent financial agreements between the following three parties:
• The principal, such as your business, purchases bonds if required by the obligee.
• The obligee, such as your clients, determines if bonds are necessary to secure their financial interests.
• The surety, such as an insurance company, underwrites and maintains the bonds.

If your business proves incapable of delivering promised goods and services, your client may recoup their losses through purchased surety bonds, at which point the surety may pursue reimbursement from your company. As such, the obligee can be assured of compensation for their losses without pursuing legal action.

Fidelity bonds—This type of bond, also known as honesty bonds, is generally intended to financially protect clients and customers from criminal or dishonest acts committed by your employees. Coverage may include contracted workers and can typically provide financial assistance in response to the following acts:

• Theft
• Forgery
• Illicit transfer of funds
• Burglary
• Robbery
• Destruction of property

Learn More About Bonds

Having served the Placerville and Georgetown, California, areas for over a century, the dedicated professionals at ISU-Atwood Agency have the knowledge and experience to help your business understand and its bond-related needs and secure appropriate solutions. Contact us today to get started.