If you’re considering opening your own small business, you’ve probably been browsing for Orlando, Florida, business insurance and determining what it is you need. Many insurance agencies offer surety bonds, but do you need them?
What Is a Surety Bond?
In simplest terms, a surety bond is a type of insurance that a business pays for so that a contractor and work on their property. In legal terms, you are known as the principal and the contractor is known as the obligee. If included in the bid, performance bond costs can be reimbursed.
How Does a Surety Bond Work?
When you purchase a surety bond as part of your Orlando, Florida, business insurance, you are required to abide by its terms. If a claim is filed because you don’t abide by its terms, you must pay for the claim as well as any legal costs. An indemnity agreement must be signed as well. It pledges your assets to reimburse any surety claims. Personal assets are not exempt. If their claim can’t be substantiated, you will not be responsible.
Do I Need to Purchase Surety Bonds?
In short, probably not. Although unique situations do arise, surety bonds are typically used by the government to protect it and citizens.
When deciding whether to purchase a surety bond or any other type of Orlando, Florida, business insurance, do thorough research to ensure you work with a reputable and licensed company.