4 Main Types of Commercial Insurance Bonds and What They Mean

If you have your own business or are about to start one, it would be in your best interest to learn about the different types of commercial insurance bonds that are out there. Though only 4 are addressed here, there are several others you should research when it comes to your business ventures. An insurance company like Foresee General Insurance Agency, Inc. in Harrison, AR can help with this process

Permit and License Bonds

A surety bond that’s required based on regulations or laws in each state is a permit and/or license bond. This is not something that the owner of a business can choose. They are in place in order to engage in and perform specific activities.

Contract Bonds

Contract bonds usually are a part of the construction industry. There are a few subcategories of this type of bond. Bid bonds are in place to ensure the bidding process when it comes to respecting requirements that are stated in the contract. It helps to avoid any frivolous bids. Performance bonds are for insurance companies or banks to guarantee that a project is completed. There also are maintenance and payment bonds under this category.

Business Service Bonds

These bonds protect clients from becoming a victim of theft. They often are chosen by businesses or individuals that use services in which they have to enter private property for performing duties such as medical care or cleaning. It ensures that the client will get financial compensation if any of their property goes missing after the services are performed. Of course, it’s necessary to show in a court of law evidence that something has been stolen.

Miscellaneous Bonds

These bonds don’t really fall into any other category. They are random in their use and have various purposes. This includes ensuring leases and guaranteeing a monthly payment like utility bills. They especially are useful when it comes to businesses that have special needs.

Want to know more about commercial surety bonds and which ones may be right for you? Discuss your needs with an agent from Foresee General Insurance Agency, Inc. in Harrison, AR today and you won’t regret it.