Getting Bonded
What does it mean to be bonded?
The term "getting bonded" covers a lot of ground, as there are thousands of different bond types, some of which vary greatly. Not all bonds function in the same manor. Some are required by law, while others are obtained to give a company's client peace of mind.
1. Fidelity Bonds - Many see the the term "Insured and Bonded" on marketing materials for janitorial services, lock smiths, etc. These bonds are called fidelity bonds. They are not a type of surety bond, but rather a type of insurance. The difference being that the company who purchased the policy is the beneficiary, not their clients.
2. Surety Bonds - A surety bond is a three-party agreement. Therefore, a company can not obtain a surety bond simply for marketing, as someone needs to be requiring the bond of them (obligee). There are two main types of surety bonds: commercial & contract bonds.
Who needs to be bonded?
Companies that are looking for a bond for marketing material do not need a bond, they want it. However, companies are often in need of surety bonds in order to operate their business, as it is typically required by law.
