How to Get Bonded
Posted on August 11th, 2009 by aileen
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Having your own business or being a part of an industry that provides services to costumers requires you to get bonded. Getting bonded means having insurance coverage that protects you and your customers from losses you may incur due to untoward circumstances. This also allows you to gain access to more and better business opportunities than those who are not bonded.
Here are some steps you can follow in acquiring a bond.
The Application Process
- Look for bonding companies. There are numerous companies out there. Check the yellow pages or go online. You can also ask for referrals from your friends and business associates.
- Choose a respectable bonding company. Be sure to choose a company that doesn’t only offer good benefits, but is also respectable in the industry. You don’t want to get a company you can’t depend on when unfortunate events happen to your business.
- Fill out the application forms. Aside from your personal information, you may also be asked for your spouse’s information.
- Read and understand the contract. Before submitting the required forms, it’s very important to be informed about what the company offers and how much you have to pay for the bond. Understand the clauses and limitations of the contract. Having a lawyer go over your contract is a good idea but not really necessary. This is just to make sure that you’ve understood the contract. There might be gray areas that need to be fully explained to you.
- Submit the application forms and all the necessary documents.
Background Check
- After submitting the application form, the bonding company will conduct a background check on you.
- This means that you will be checked for police and criminal records.
- Personal and business references may also be contacted.
- The rationale for this is to establish the company’s trust and confidence in you. They need to know that you’re a law abiding individual who doesn’t engage in illegal acts and unethical business practices.
- After the background check, the company will determine your eligibility for a bond.
- If you pass, congratulations! You’re now bonded.
What You should Know
- Getting bonded protects you from dishonest employees. This ensures that your company will not suffer any losses when your employees don’t carry out their duties properly.
- A bond reassures your patrons and potential customers that they will be safe in your hands in cases where you’re unable to execute your obligations.
- There are different types of bonds. Here are some of them
- A performance bond reassures your employers or customers that you will perform the duties indicated in the contract.
- An indemnity bond is for the reimbursement of any loss that may occur in case you’re not able to complete your obligations.
- A payment bond reassures subcontractors and other providers of your payment for their services.
Getting a bond is very important. Don’t take this simple matter for granted. It may cost you your money and business if you operate unbonded.
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