Sometimes confused with insurance—probably because many insurance carriers offer bonds and some agencies sell them—bonds are financial instruments that guarantee required performance of some kind. Sometimes, government regulation requires that they be in place. Sometimes consumers—personal, business or governmental entity—demand them.
Simply put, a Connecticut bond helps ensure that your business does what it’s supposed to do and that the entity you’re doing it for doesn’t bear any financial harm based on you or your employee’s actions or failure to perform. The bonding company, also known as a surety, ensures your payment by requiring security or collateral if a claim is made against you.
General contractors and businesses with government contracts frequently need bonds. For example, all Federal construction contracts greater than $150,000 require a bond as a condition of contract award. But other businesses need bonds, as well. These include temporary staffing agencies, janitorial firms and even car dealers. Bonds are sold and backed by a surety company, which guarantees your firm’s performance. It’s a good alternative to using a business line of credit, because it frees up potential capital your business can use to grow.
At Paradiso Insurance, we specialize in providing both large and small Connecticut businesses with the following commercial, contract and business service surety bonds:
- Performance – These guarantee that work will be fully and satisfactorily completed according to the terms of the contract document—the agreement between the contractor and the owner (including all subsequent modifications), as well as the general conditions, drawings, and specifications.
- Bid – These are preliminary bonds that are intended to keep frivolous bidders out of the bidding process. They guarantee that a successful bidder on a specified project will actually enter into a written contract with the project owner and will subsequently furnish final bonds, including performance and payment bonds.
- Indemnity – These guarantee any losses that might occur if a party fails to meet deadlines that were established in a contract. They’re often used by government entities, businesses and even individuals to make sure an agreement will be fulfilled as stated. A number of different types of indemnity bonds are used in various business situations.
- Payment – These guarantee that the general contractor will fully pay all of the subcontractors, the various material suppliers and the individual laborers that the contractor hired or used in association with a contract it entered into.
- License – These bonds, also known as permit bonds, often are required by government agencies as a condition of being licensed. They guarantee that businesses will adhere to laws and regulations that various government agencies impose and enforce. Such bonds are purchased by collection agencies, freight brokers, home inspectors, car dealers, notaries and a wide range of other businesses and professionals.
The process of getting a bond in Connecticut can be confusing, especially for businesses that have not needed them before. At Paradiso Insurance, we know bonding and we’ll work with you to make sure you get the right bond with the right terms at the right price. Stop by our office, give us a call, or complete our quote request form today.
Coverages to Consider
At Paradiso Insurance we understand how this important protection can help you avoid costs associated with workplace injuries. And we’re experts at finding the right coverage for your business.
We’ll show you the various options that exist to keep you protected and put together a program with one of the dozens of top-notch insurance companies we work with that best fits your particular needs.
If your firm uses technology in the course of conducting business, you face a cyber risk. The best thing you can do is understand your risks and make sure your business is properly protected.