Bond insurance is an insurance product that protects both entities and consumers against a contracted party’s default on a job or the mishandling of property and funds by a business’s employee, manager or officer. For businesses that find themselves bidding for work often, this coverage is a competitive edge as it provides an important element of financial security.
Business Service Bonds protect consumers’ (obligee’s) money, equipment and other belongings that are mishandled by your employees. A good example of a business that this would apply to is a car dealer or a laundromat where the business owners and employees are in control, care, and custody of a customer’s property.
A Performance Bond is designed for large construction contracts, sometimes issued by a municipality to a general contractor. This is an agreement between the principal (general contractor) that may run into unexpected situations during a job and a surety or guarantor (insurance carrier) which would help the contractor with a fund to complete the job.
Other bond types are designed for the financial services industry, for example, Real Estate lawyers that hold money in escrow would require a Fidelity Bond for protection against wrongful acts as a fiduciary.
For businesses offering retirement plans like a 401K plan, under ERISA law you may be required to obtain an ERISA Bond which covers the mishandling of retirement funds by employees and managers of a business.
While called bonds, these obligations to protect an employer from employee-dishonesty losses are truly insurance policies.
ING Insurance Services can assist in determining whether or not this specific type of insurance is needed for your business and will assist throughout the application process to secure the appropriate coverage.