What are Surety and Fidelity Bonds?
Bonds are primarily known as Surety Bonds or Fidelity Bonds. Depending on the exact nature of the bond they can serve multiple functions for business and individuals. Typically the bond is used as a financial guarantee to a third party in the event of a claim against you or your business. It many cases it is required by a regulatory agency when issuing a business license or permit.
What does a Surety and Fidelity Bonds Cover?
While there are numerous applications in Florida for Surety and Fidelity Bonds, the following are some examples where bonding is most commonly used:
. A Florida Used Car dealer must have a $25,000 Surety Bond in order to sell vehicles.
. A Florida construction contractor must secure a Surety bond in order to obtain a license or to pull a construction permit.
. Many Florida judges will require that the executor of an estate provide a Probate Bond to the court. Probate Bonds serve as a guarantee that the executor will not damage the estate.
. An ERISA Bond is a requirement for every fiduciary of a retirement plan. This invokes a Fidelity Bond which must be secured to provide a guarantee that plan funds are not lost due to dishonesty or fraud by any of the plan officials.
. An Employee Dishonesty Bond protects Florida business from various acts of theft and embezzlement by employees.
Who is responsible for purchasing Surety and Fidelity Bonds?
Numerous Florida business license and permits are dependent on securing these bonds. Various bonding requirements apply to almost every industry across the State.
Are Surety and Fidelity Bonds Costly?
The costs of these bonds vary greatly, and are dependent on numerous factors. Some of the more common factors determining the cost of the bonds are:
- Type of industry
- Size of Bond
- Credit standing of business owner
- Past claim history
What is needed to obtain a bond?
Most Surety and Fidelity Bonds only require the completion of a short application. In certain intricate bonding situations, a more detailed financial statement of the owner and business may be required.