Bonds in Revere, MA

Despite your business’s best efforts, there may be times when it falls short of its goals. This can be particularly problematic if others, such as clients and customers, are depending on you to come through and provide essential services. In these situations, you could face costly financial and reputational consequences, necessitating ample preparations, including bonds.

What Are Bonds?

Bonds can be essential to your business’s risk management and loss control measures. These products are often sold by insurance companies and may couple with various coverages and policies to establish robust and versatile financial protection even during difficult situations. While bonds may sometimes be referred to as bonds insurance, they differ from traditional policies by typically being retained for a specific job or contract, rather than establishing ongoing coverage for a period of time (e.g., a plan year).

Types of Bonds

There are many kinds of bonds. These tools can be selected and customized per your business’s needs and clients’ preferences. In the United States, businesses and clients may most often rely on the following primary types:

• Surety bonds—These bonds include many subcategories themselves, but generally serve the purpose of ensuring that other parties have a way to recoup their losses if you fail to deliver on your contractual obligations. They typically establish a relationship among the following three parties:
  • The principal (e.g., your business)
  • The obligee (e.g., your client)
  • The surety (e.g., your insurance company)

If the obligee deems surety bonds necessary to protect their financial interests, the principal is responsible for purchasing them. The surety then underwrites and maintains the bonds, which can be used to compensate the obligee should work go unfinished.

• Fidelity bonds—This type of bond is also referred to as honesty bonds and may provide financial relief if your business’s employees or contract workers commit dishonest, fraudulent or criminal acts. For example, if you operate a cleaning company and dispatch workers to clients’ sites, fidelity bonds could be necessary to limit the potential ramifications of the following acts:
  • Theft
  • Destruction of property
  • Burglary
  • Forgery
  • Illicit transfer of funds
  • Unlawful data access

Learn More

Since 1990, the team at R.M. Cataldo Insurance Agency has served businesses and families in the Revere, MA, area. Contact us today to get started.