The Business of Bonding and Bid Bond
Often times, according to the type of business you are in, you will have to be bonded. This is called a surety bond. Say you have a cleaning service for instance. There is a risk involved because you and/or your employees go into people’s houses and companies, entrusted with the responsibility of that home or organization while the owners are away. You need a bond to ensure trust, that you or your employees won’t steal, for one thing. That is just one kind of bond. There are many others that cover all different types of business situations, such as a bid bond.
You can learn all about bonds and get the one you need from JW Bond Consultants, an experienced Bond Agency They will educate you so you can feel more confident with the process of obtaining a bond at very competitive rates. You can also dispel myths about what bonds are and do by visiting their site, myths like these:
You need to pay the full amount of the bond. Wrong. Some people assume that surety bonds must be paid in full in order to obtain a bond, which is simply not true. While some bonds will require 100% collateral for higher risk cases, most will simply pay an annual premium which is a percentage of the total bond amount.
The principal is the beneficiary in the event of a claim. Sorry, but this could not be farther from the truth. As we learned earlier, the obligee is the beneficiary and the principal will have to pay the surety any funds paid out plus attorney fees.
“That’s too much! A $50,000 auto dealer bond only costs $250 year.” Anyone that has been in the surety bond industry for a couple years knows that rates have drastically changed due to historic surety losses around the turn of the millennium. Bonding companies have since changed their underwriting guidelines and have become much more conservative. The soft bond market is a thing of the past and so are ridiculously low rates.
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