When starting a small business, one of the first things you need to do to protect yourself is getting the right bond and insurance coverage. But the real question is, where to start?
With so many options for business bonding and insurance available today, it can be hard to know what to choose. Do you need general liability insurance? What about product liability insurance? Or would workers’ compensation insurance be better?
Given how complex insurance can be, most people are bound to have questions when looking for coverage. If this is you, All N One Bonding and Insurance can help. We offer comprehensive bonding and insurance packages tailored to meet your business’s specific needs. We work hard to find you the right coverage at a fair price.
How To Bond And Insure A Small Business
Getting your small business bonded and insured is a multi-step process that can be divided into two main parts.
1. Getting Small Business Insurance
To apply for small business insurance, you have to complete an application form with your insurance company. Then your insurance agent will determine the correct type of insurance for you.
This process is fairly simple and straightforward, but the details can be complex. Your insurance agent will look into things such as your business’s leasing information, company inventory, office equipment, and more.
The information you provide will determine the terms, rate, and coverage of your insurance package.
2. Getting A Surety Bond
To apply for a surety bond, you have to call a licensed surety bond provider that services your area.
The surety bond company will ask you a series of questions regarding the bond to determine what would work best for you.
Be prepared to provide important company information and documents, which can vary depending on your situation.
After the bond company has your information, they will process the underwriting, setting the terms and premium to complete the contract.
You will then have to sign the contract and pay the premium, after which your business will be bonded.
What Exactly Does It Mean To Be Bonded And Insured?
Bonding and insurance are both great ways to protect your business from taking financial losses, but they work in different ways.
The main purpose of insurance is to provide coverage for specific situations and items of value.
The main purpose of surety bonds, on the other hand, is to ensure that contractual obligations between parties are fulfilled.
Essentially, being both bonded and insured means that your business has a wider and more flexible range of coverage.
Note: For those unfamiliar with how bonding and insurance work, when a valid insurance claim is made, the insurance company is obligated to cover the cost of the claim according to the terms of the insurance contract.
When a claim is made against a surety bond, the principal (the person or company that purchased the bond) can either satisfy the claim or allow the surety bond company to do it. If the surety bond company is forced to settle the claim, then the principal will have to reimburse them.