Own A Service-Centered Business? 3 Reasons Why You Need Surety Bonds

Posted on: 29 June 2017

If you own a business that provides a service, such as in the construction business, you need surety bonds. Surety bonds go beyond the normal commercial insurance policies, to provide you with protection that you might not have realized you need. If you don't have surety bond protection for your business, here are three reasons why you need to purchase the protection as soon as possible.

Reduces Your Financial Obligations

There may come a time when you're unable to complete a project for a customer. If that happens, your customer is going to want some financial compensation for the inconvenience. This is particularly true if your customer needs to hire another company to complete what you were unable to. If you don't have surety bond protection, you'll be left holding the bag for that liability. However, if you do have surety bond protection, your financial obligations will be reduced, and your customer will receive compensation for their inconvenience.

Protects You Against Employee Crimes

When you own a business, there may come a time when you're the victim of a crime committed by one of your own employees – such as theft, embezzlement, or even fraud. If you don't have protection against those crimes, you could be out a substantial amount of money. However, if you add a fidelity bond to your coverage, you'll be protected against those types of losses. This type of coverage is particularly beneficial if you offer a retirement plan through your business. The bond protects your employee retirement accounts from fraud and embezzlement.

Ensures You'll Receive Payment

When you own a business that provides a service, you always run the risk that a customer won't pay for services once they're completed. If you've provided a large service, such as a room addition, or a swimming pool, you can't just go and recover the property. You'll need a better way to recover those payments. That's where the surety bond comes in to play. With a surety bond, you'll be protected against customers who refuse to make payments once services are rendered.

Don't take chances with the financial security of your business. You owe it to yourself to obtain surety bond protection. They're not difficult to purchase. In fact, you can obtain them through the insurance company, like Service Insurance Company, that handles your commercial insurance needs. Once you have surety bonds, you'll be protected against the inconveniences that can sideline your business.