Guide to Small Business Bonds & Insurance

Starting a company comes with a large to-do list, and one of those tasks may be getting your small business bonded and insured. After all, this is often a requirement to obtain certain professional licensing or contract work.

In our guide below, we dive into everything you need to know about getting surety bonds and insurance. We cover the difference between bonding and insuring, how they can help grow your business, where to find the best premiums, and more.

Being bonded and insured means you have an active surety bond and a business insurance policy. 

Surety Bonds vs Business Insurance: What’s the Difference?

Business insurance protects your business, while surety bonds protect your customers and the general public.

Surety Bonds: Protecting Your Customers 

A surety bond compensates your customers if your business conducts unethical or illegal activity that causes them financial loss—for example, a breach of contract, employee theft, etc. 

You generally only need a surety bond if one is required for business operations (ex. getting licensed). 

Insurance: Safeguarding Your Business Assets

Business insurance compensates you if you suffer financial loss from unforeseen events such as theft, accidents, weather, fire, etc.  Insurance may be required to operate legally. However, even when it is not, it is often opted for to protect business assets. 

License and Permit Bonds

Required to get some types of work licenses and permits. These bonds are commonly needed by auto dealers, contractors, freight brokers, and more. 

Contract Bonds

The Miller Act requires contractors who work on construction projects over $100,000 to hold a bond. This is mainly for public construction projects but can also apply to private projects.  

Business Service Bonds

Protects your customers from dishonest employees (ex. theft). While this is one of the few surety bonds that may be elective, it can greatly increase client comfort and trust. 

Fidelity Bonds

Protects both your customers and your company from dishonest employees. It provides coverage for money, securities, and other property losses resulting from theft or embezzlement.

General Liability Insurance

Protects your company from claims made by others for injury or wrongdoing. Also known as Business Liability Insurance. 

Commercial Property Insurance

Protects your business property and its contents. If either is damaged, the insurer will pay to repair or replace the losses. 

Business Owners Policy (BOP) Insurance

A policy that combines both General Liability Insurance and Property Insurance. Ideal for small to mid-sized businesses. 

Worker’s Compensation

A legally required policy for businesses with employees. It covers medical expenses and lost wages if an employee falls ill or is injured due to their employment. 

Usually, a bond is a legal requirement to operate your business. However, in cases where it is not, certain bonds can help you grow your business. 

Build Customer Confidence with Bonds

A surety bond assures your customers that if something goes wrong, they are financially covered. It also lends your business legitimacy. Showing that you are bonded and insured can greatly help build customer trust—especially for new businesses. 

Open New Opportunities with Bonding

Certain bonds can allow you to take on bigger contracts in some industries. For example, a contract bond is a requirement for construction companies to take on projects over $100,000. Commercial cleaning companies also commonly need bonding to take on large contracts.

Many industries at higher risk for fraud have bonding requirements in place. It isn’t uncommon for businesses or individuals to need a surety bond to get licensed in these industry professions, which include:

• Auto Dealership

• Cleaning Service

• Clinic

• Construction Company

• Freight Brokerage

• Insurance Brokerage

• Mortgage Brokerage 

• Pharmacy

• Public Notary

• Security Company 

• Travel Agency

*If you answered yes to any of the above, see the next section.

Step 1: Research Requirements

Check the website of the government agency that oversees your industry. Often, bonding requirements can be found on their licensing page. If you can’t find them, you can also:

• Contact the agency directly. 
• Check the legislation.
• Talk to one of our surety experts. 

Step 2: Get Business Insurance

Find which business insurance you need. 

Step 3: Apply for Your Bond

Fill out our online bond application. It is quick, easy, and available 24/7. You will need to know the type of bond you need and the full bond amount required.

Step 4: Purchase and File Your Bond

A bond quote will be sent directly to your inbox. This takes only a couple of minutes for most types of bonds. 

Login to our website to purchase your bond. We will send you an electronic bond copy as soon as your payment clears. If your obligee (the party requiring your bond) needs the original bond, we will send it by mail. 

Step 5: Renew Coverage Regularly

We send bond renewal notices 30 days or more before a bond’s expiry date. With this notice comes instructions on how to renew your bond.

JW Surety Bonds is the nation’s largest surety bond and insurance service. You can get bonded and insured all in one place while enjoying other benefits such as:

• The lowest rates in the industry. Our high volume allows us to negotiate the best bond rates on your behalf.
• Instant bond quotes that are available 24/7.
• Dedicated bond experts to guide you through the entire bonding process. 
• In-house claim specialists.
• 100% money-back guarantee. We will send you a full refund if your policy is not accepted.