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What is Bonding Insurance?

What is an Insurance Bond? Surety Insurance Explained

“Insurance bonds” or “bond insurance” are general terms sometimes used by those looking to get bonded with a surety bond, or want to insure their business with fidelity bonds (there is no legitimate bonding insurance definition when it comes to surety bonds).

If you read this article in full, you’ll have a great understanding of what bond insurance is, the difference between surety bonds and insurance, and which bonds you need.

You can use our tool to get a free bond analysis and determine which bond is right for you.

You can also watch our video below which quickly explains the different between surety bonds, insurance and fidelity bonds (which protect you).

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What is "Surety Bond Insurance"? Surety Bond vs Insurance

Surety bonds aren’t insurance for you, they are insurance for the party requiring the bonds (called the obligee). Surety bonds protect the public by guaranteeing you will abide by the terms of the bond; if you don’t, claims can be filed which you’re responsible to pay in full (including legal costs). Keep in mind, surety bonds are never optional to obtain, as they’re usually required by a government agency. Read our guide to learn more about how bonds work. Since there are hundreds of different surety bond requirements, you can skip to the bottom of this article to find the surety bond you need.

Frequent Questions

How do I know if I need business bonding insurance?

You only need a surety bond if it is required of you. Fidelity bonds are usually optional, but you’ll want to get this type of bond if you want to obtain insurance for your business or clients.

Is it possible to need both surety and fidelity bonds?

Yes, some professions require you to have surety bonds and insurance, such as security guard services. If you need help determining which bonds you need, please contact us.

How do I get bonding and insurance for my small business?

If you need a surety bond, you can apply and get approved instantly. If you’re looking for insurance, you’ll need to fill out our online application to get a firm fidelity bond quote.

Insurance Bonding with Fidelity Bonds

Fidelity bonds are an insurance product that protect against employee dishonesty such as theft and are usually optional (ERISA bond insurance is an exception, as it’s required by law to protect participants of employee benefit plans). Small businesses that enter their client’s homes, such as a cleaning company, are often interested in this type of bonding. There are a few different types of fidelity insurance bonds that can provide protection for your business or your customers. You can learn more about bonding and insurance by reading our how to get insured and bonded guide.

Save Money with the Right Bond Insurance Agency

Now that we answered “what is surety insurance?” it’s important that you partner with the right company for your bond and insurance needs. Companies who provide bonds must meet certain requirements to do so. If you get your bond from one that doesn’t meet all of the necessary requirements, your bond can be rejected with no refund. Read our guide to learn how to find the right bond insurance companies for you.

Bonding Insurance Cost

Surety bond pricing is a small percentage of the full bond amount (also known as your rate), which is usually based on your personal credit. You can learn more about how your surety bond cost is calculated, or you can use our surety bond premium calculator to get an instant estimate.

Fidelity bonds are fairly cheap when comparing them to surety bonds and the pricing will vary based on the insurance coverage type, coverage amount and number of employees. If you want to get a firm quote on your bonding insurance, you’ll have to fill out our online application.

Find the Surety Bond You Need

There are hundreds of different surety bonds required across the U.S. for many professions and other uses. If you purchase the wrong bond, it will be rejected by the obligee.

License and Permit Bonds

License and permit bonds will allow you to get a license or permit for your business, and ensure you will follow laws and regulations. Some of the most common license bonds include auto dealer surety bonds and contractor's license bonds. You can select your state from the map below to determine the requirements in your state.

Contract Bonds for Projects

Contractor bonds are needed to work on construction jobs (generally public jobs), and guarantee you will complete projects properly. They are required by cities and towns as opposed to states.

Court Bonds

Court bonds are required by the courts in your state to ensure you will fulfill your responsibilities as ordered by a court. A fiduciary bond is required to operate as an executor of an estate. Appeal bonds are needed to appeal a court decision. Lastly, guardianship bonds are required to become the legal guardian of a minor/disabled individual.