Surety & Fidelity Bonds For Your Business

Business bonds are much like insurance in that they back up a promise to do something. If this promise is broken, the bond pays off to complete the promise. Surety and fidelity bonds are the two most common types of business bonds needed, depending on the type of work your business conducts. Certain business-related activities will require that you acquire a bond, and Elite Insurance Solutions can help you assess whether or not a surety or fidelity bond is necessary. If deemed necessary, we will help you locate the best bond for your business.

What Is A Surety Bond?

A surety bond is a bond given to protect someone against loss should the terms of a contract not be filled. In this case, the surety company would assume liability for nonperformance and would find another contractor to complete the contract or compensate the bond’s owner for the loss. Any federal construction contract valued at $150,000 or more requires a surety bond when bidding or as a condition of contract award. Likewise, many service contracts and some supply contracts require surety bonds. Most state and municipal governments will require them as well.

There are four types of surety bonds:

1. Bid Bond: Ensures the bidder will enter into the contract and supply the agreed payment and performance bonds if awarded the contract.
2. Payment Bond: Ensures suppliers and subcontractors get paid for work performed.
3. Performance Bond: Ensures the contract will be completed as stated in the terms and conditions.
4. Ancillary Bond: Ensures that requirements integral to the contract are performed.

What Is A Fidelity Bond?

A fidelity bond covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals—usually employees whose misconduct (dishonesty, theft, or embezzlement) has resulted in loss for a company. These bonds may apply to one employee or can cover the actions of all employees. Whether or not you want or need a bond will depend on the kind of work your business conducts. Contractors, manufacturers, and suppliers commonly maintain fidelity bonds.

Have questions about surety and fidelity bonds? Or do you have other business insurance needs? We provide a range of business coverage, including health, auto, workers’ compensation, directors & officers insurance, errors & omissions insurance, kidnap & ransom insurance, marine insurance, foreign liability insurance, and retirement plans.

For more information, visit our Locations & Contact page and find the Tennessee location and agent nearest you.

 

Could your company benefit from the extra protection provided by kidnap and ransom insurance? Ask us for more information about this special business insurance to be sure you and your employees have the coverage you need.

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Testimonials

My relationship with Barhyt Henry of Elite Insurance has been extremely beneficial to my company and myself in a variety of ways. Barhyt assisted us immensely with our insurance needs during the establishment of Vericom Global Solutions. In 2009 when we started Vericom his guidance helped us navigate the many issues related to facility, inventory and liability insurance. Vericom is a company that competes with established multi-billion dollar organizations and the support provided by Elite Insurance was more than helpful.

During the last five years I have worked with Barhyt and Elite Insurance not only for my commercial insurance requirements but also for my individual personal insurance needs. His and their support is greater appreciated, valued and timely.

~ Ken Rodgers, Knoxville, TN