If you are a business owner, you have probably already purchased general liability insurance, workers’ compensation, cyber insurance, and all other types of commercial insurance that fit your business needs. However, have you ever heard or thought about bonds insurance? If not, The Insurance House serving clients in Tucson, AZ breaks down it for you.
What Is Bonds Insurance?
Bonds insurance is an agreement between three parties: the principal (the party buying the bond), the surety (the company that is writing the bond), and the obligee (the department requiring the bond). The purpose of bonds insurance is to provide financial stability or guarantee to the entity or company purchasing it.
How Does It Work?
It works just like any other type of insurance. If a business owner does not meet the requirements of a bond, a claim may be filed against the bond. This makes bonds insurance similar to a credit to the principal.
Types of Bonds
Different businesses need different types of bonds depending on their business purposes. The most common three types of bonds are the following:
- Permit or license bonds. Certain businesses or individuals may need these bonds in order to be able to operate legally. They are auto dealers, freight brokers, contractors, and others.
- Contractor bonds. This type of bond is for individuals or companies that are involved in public construction projects.
- Court bonds. Certain courts may also require bonds.
The Insurance House – We Help You Get Insurance You Need
If you are a resident of Tucson, AZ or any other nearby town, and you want to know more about bonds insurance, The Insurance House will be glad to answer all your questions. Our mission is to help our clients find insurance that will protect them, their business, and their belongings. You can visit our website or give us a call for more information.