Bonds in Katy, TX

The business world is full of twists and turns, and some situations may keep you from fulfilling your duties as planned. In these situations, those relying on you to get the job done could face financial losses for which you could be found at fault. To curb potential ramifications and legal situations, you may wish to retain appropriate loss control measures, such as bonds.

How Do Bonds Work?

Bonds are financial instruments often sold by insurance companies. These products can cover specific contracts and jobs and may work with insurance policies to secure your company’s financial interests. Bonds may come in many forms, with each variation suitable for different situations. As such, it’s important for your business to understand its options and invest in the right securities.

What Are Surety and Fidelity Bonds?

Two of the most common classifications of bonds U.S. businesses use are surety bonds and fidelity bonds. Consider the following guidance to determine which may be suitable for your company:

• Surety bonds are often purchased by contractors or other businesses that agree to provide professional services to clients and customers. If your business cannot complete the terms of a contract, these bonds can be used to help other parties recoup their losses without needing to pursue legal action.
• Fidelity bonds may also be referred to as honesty bonds. These loss control tools can financially protect your business from dishonest, criminal or fraudulent acts its employees commit. For example, if you dispatch a staff member to a client’s location, at which point they commit theft or damage property, your bonds could limit out-of-pocket consequences.

Who Needs Bonds?

Many businesses that engage in formal agreements with clients, customers and other parties should consider bonds a top priority. These investments can help protect both your company’s finances and its reputation. Additionally, many clients, such as government agencies, may require certain bonds be purchased before even allowing you to be eligible for jobs.

Learn More

Founded in 1915, Katy Insurance Agency has over a century of experience serving businesses in the Katy, TX, area. Contact us today to learn more about bonds.