How Do Bonds Protect My Business?

Throughout your company’s journey and growth, you may inevitably encounter scenarios in which you cannot deliver your best work. Accidents, errors and other incidents can derail your operations and leave your customers and clients wanting. Planning ahead with ample financial security is critical. Regarding risk management and loss control, bonds can play pivotal roles in protecting your business’s interests, reputation and relationships.

What Are Bonds?

Typically sold by insurance companies, these loss control devices can help your company ensure sufficient means to compensate other parties and limit financial and reputational harm arising from unexpected mishaps. Bonds can couple with your business insurance portfolio to form two core pillars of risk management; the right combination of investments can lay the groundwork to ensure you can get back on track following a multitude of incidents and unexpected scenarios.

How Can These Measures Help?

Generally, bonds act as investments in future financial security. Your business can choose from many types of bonds, which may offer compensation to other parties adversely impacted by your company’s issues or shortcomings. Consider the following scenarios:

• Contractors often retain surety bonds to protect their clients’ interests. If the contractor cannot complete their work as promised, the bonds they’ve purchased can be used to reimburse the developer or project owner without lawsuits.
• Cleaning services may frequently purchase fidelity bonds. Also known as honesty bonds, these loss control measures can compensate clients and customers if an employee commits an unlawful or dishonest act, such as theft, forgery or property damage.

Without appropriate bonds, other parties may have no choice but to sue your company, which could result in far more costly legal proceedings. Furthermore, the court case could damage your reputation and negatively impact future business prospects.

We’re Here to Help

Contact Esquire Insurance Services of Georgia today to learn more about bonds and how they can help your business.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.