As a small business owner, you're somewhat of a one-person show. From operations to protection, everything has to do with you and your efforts. Make sure you're doing your part; especially in the area of protection.
Rely on Surety Bonds
In terms of function, surety bonds are the equivalent of contract agreements that help ensure all parties involved in a transaction are protected. In terms of what they are, you could say they are one part credit and one part insurance.
In the event any party does not uphold their end of the agreement, the surety bond would kick in and provide compensation for the particular loss. For instance, if you entered an agreement with a company to provide a large number of products and they failed to uphold their end of the deal, the surety bond would ensure you were compensated for your products.
Consider These Other Types of Bonds
Here are just some of the different types of surety bonds all small business owners should be familiar with.
Contract bonds are a great idea if you're going to have any work performed on your building, such as a remodel. The surety bond will help protect you in the event the construction team completes the job, but either not up to proper quality levels or they don't complete it based on your specifications, such as installing composite wood when you requested and paid for hardwood.
The overwhelming majority of your team members will have the best interest of the business at heart, but this is not always the case. A fidelity bond can provide your business with financial protection in the event of a financial loss through the hands of an employee stealing or embezzling money. In addition to employee theft, this bond provides coverage from mishandling of funds or illegal activity by a book-keeper.
In the event you find yourself in the middle of a legal battle, having a court bond can be especially helpful. For instance, if someone makes a claim against your business and files a civil suit, the court may require you to obtain the bond so that in the event the other party is awarded their request, they are guaranteed to receive the judgment.
Make sure you are doing your part to keep your business protected. An agent from companies like Service Insurance Company can help you understand how a bond will help your business and what types of surety bonds you should consider.