Bonds are an important part of doing business in some industries. Often referred to as surety bonds, bonds often serve as assurance that you will deal honorably and with integrity with the other party – partly because you’ve put your reputation and your own money on the line in order to make that promise. These are a few ways in which businesses use bonds.
Essentially, contract bonds exist as assurance that your business will meet the terms of the contract or you will pay the bonded amount to the client. These types of bonds are quite common when it comes to construction work, government contracts, and can be requested by clients in almost any field.
It is up to you whether you are willing to offer this guarantee, but it can mean the difference between getting the contractor or not. There are three different types of contract bonds.
- Bid Bonds – protects the project owner if the successful bidder refuses to enter the contract or provide the necessary bonds or security.
- Performance Bonds – protects the project owner if contractors default on their obligations according to the bonded contract.
- Payment Bonds – ensures that the contractor is responsible for and will pay subcontractor labor, materials, etc. that are associated with the project.
Fidelity bonds offer businesses protection from the consequences of fraudulent or dishonest acts committed by their employees. This can include monetary issues, such as theft or embezzlement, but can also extend to physical damage caused by employees as well.
As an employer, you may choose to purchase a blanket fidelity bond that extends to the actions of all your employees, or you may choose a tailored fidelity bond that covers one or more specific employee.
Sometimes, these bonds are referred to as judicial bonds. They are often required to guarantee protection from possible losses in court proceedings. The most common types of court bonds include:
Cost Bonds – guarantee that costs associated with appealing lower court decisions will be paid.
Indemnity to Sheriff Bonds – protects sheriffs from suits filed by those whose property has been seized.
Plaintiff’s Bonds – provides protections for defendants that damages will be made, by the plaintiff, if the court rules in favor of the defendant.
Attachment Bonds – is required anytime courts seize property in order to secure judgments. The bond guarantees that if the decision goes against the plaintiff, the defendant will be paid for damages arising from the attachment.
Replevin Bonds – guarantees that seized properties will not be sold, disposed of, or changed until the judgment has rendered. This is generally only ordered when the plaintiff takes back property held by the defendant before the trial commences.
Other court bonds that are fairly straightforward, and quite common, include:
- Administrator Bonds
- Executor Bonds
- Conservator Bonds
- Guardianship Bonds
These bonds are often required by federal, state, or local governments. They may require certain conditions or ensure certain standards. The following bonds are some of the more common commercial bonds.
- License and Permit Bonds
- Performance and Payment Bonds
- Tax Bonds
- Warehouse Bonds
- Customs Bonds
Phoenix Insurance Group is proud to serve Central and North New Jersey’s insurance and bond needs. Whether you’re a business offering surety bonds or you find yourself in need of court bonds for various legal actions, our team can help you secure the bonds you need in a cost effective and practical manner.
Call 908-879-6500 today to learn how we can help you with all your bond, insurance, and risk mitigation needs.