Many types of businesses are required to post a bond in order to conduct business. An example of firms that are required to post bonds are general contractors and even firms applying for sales tax permits.

Basically, a bond is a promise to pay. In exchange for a portion of the bond, or a premium, an insurer will promise to pay a required amount of money upon a default. In the event of a construction bond, the insurer will be required to complete the project in the event of a default or bankruptcy of the contracting firm. If a retailer does not pay its required sales tax payment, the bond will

make the necessary payments – up to the bond amount.

There are two types of bonds – fidelity bonds and surety bonds.

Fidelity Bonds protect an insured against the dishonesty or fraudulent act of employees.

Surety Bonds guarantee an obligation – such as completion of a project or payment.

Be sure to find out what type of bond is needed and the total amount of the bond. Kingsbridge Insurance Brokerage can help ensure that your bond is completed in compliance with the requirements and the proper paperwork is completed for your bond.