A bond guarantees the performance of a contract or other obligation. Unlike insurance in which the insurance company agrees to pay you direct for a loss incurred; a bond will guarantee your faithful performance to another party and will pay the third party should you fail to meet your obligations.
There are numerous types of bonds categorized as fidelity, contract, license and permit, court judicial, court fiduciary, public official and many miscellaneous bonds that include guarantees of financial performance.
Fidelity Bonds – Employee theft can deliver a striking blow to a business. According to a national survey, one-third of all employees admitted stealing from their employers during the previous year. These bonds guarantee that the bonded employee(s) will handle their employer’s money and property with fidelity. In other words, it guarantees they won’t steal. Types of fidelity bonds available include employee dishonesty, janitorial services and pension/trust (ERISA) bonds.
Contract Bonds – These bonds are designed to guarantee the performance of obligations under a contract. It is a guarantee to another party that you will perform according to the terms of a written contract. Construction contracts constitute most of these bonds. Contract bonds protect a project owner by guaranteeing a contractor’s performance and payment for labor and materials. Because the contractor must meet the bonding company’s pre-qualification standards, construction lenders are also indirectly assured that the project will proceed in accordance with the terms of the contract. The various contract bonds available include performance, bid, payment, maintenance and supply bonds.
License and Permit Bonds – These bonds are required to obtain a license or a permit in any city, county, or state. They guarantee license and permit compliance of the underlying statute, state law, municipal ordinance, or regulations. They may be required for a number of reasons, for example the payment of certain taxes and fees and providing consumer protection as a condition to granting licenses related to selling real estate, motor vehicles and contracting services.
Court bonds – These bonds are required in some action of law and generally are divided into two classes — plaintiff and defendant.
Fiduciary Bonds – These bonds guarantee an honest accounting and faithful performance of duties by administrators, trustees, guardians, executors, and other fiduciaries. Statutes, courts, or legal documents may require a bond for the protection of those on whose behalf a fiduciary carries out their duties. They are needed under a variety of circumstances, including the administration of an estate and the management of affairs of a trust or a ward.
Public Official Bonds – These bonds protect the interests of taxpayers and consumers; many public officials are required to be bonded by statute or ordinance. Public official bonds guarantee that a public official will handle money or other assets entrusted to him or her with honesty. The bond may also guarantee that the official faithfully performs his or her duties. The various bonds available to public officials include; individual, named schedule, position schedule, blanket and blanket position bonds.
Miscellaneous – This section includes types of coverages that do not fit into any of the other well-recognized categories of bonds. These may include notary public bonds, notary public and tax preparers’ errors and omissions insurance.
To learn more about these coverages, we invite you to contact our office during normal business hours to speak to a representative. Our local telephone number is (978) 534-8329 or toll free at (800) 348-7779.
Should you prefer to contact us by email to express your interest in obtaining a quote for these coverages, please include your name, telephone number and a best time to call in your email to us at info@legereins.com