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While both business insurance and a bond offer protection for your company, they have distinct differences. To maintain a good image among consumers, it would be best to have some type of protection in place. Learning more about each option can ensure you get the most suitable choice to not only conduct business with confidence but also to protect your establishment from legal or financial mishaps.
Business Insurance
Operating a business comes with many responsibilities as well as unexpected setbacks. Those costly mishaps could include lawsuits, natural disasters, and a wide range of accidents, both onsite and offsite, caused by products or services the company offers. Having business insurance can protect your company, employees, and customers.
Bonds
A bond ensures a job can be finished as agreed upon, including the completion time. The bond will provide compensation for any damages caused by the business’s faults during that specific time.
The company that issued the bond will generally pay for the damages up front. However, you’re responsible for repaying it based on the agreed-upon amount listed in a legal document.
Depending on the type of business you operate, a bond may be required before you can officially open to produce products or offer services to consumers. The rules and regulations will vary depending on your industry, location, and current laws.
Types of Insurance Coverage & Bonds
You can select insurance options based on the type of business you run. Some of the different choices include product liability insurance, commercial property insurance, home-based business insurance, and general liability insurance.
Some of the different bonds available to businesses are janitorial bonds, fidelity bonds, license and permit bonds, and surety bonds, which are the most common. The type of business you have will generally determine the type of insurance or bond you need. For example, a janitorial business will typically need a janitorial bond to cover issues such as theft, whereas a surety bond is obtained to guarantee a business fulfills its contract but receives coverage in the event it fails to do so.
Main Differences
If your company experiences lawsuits and other claims, an insurance policy will protect your business. In contrast, a bond will protect your client via reimbursement if you cannot fulfill tasks within an agreed-upon timeline.
Business insurance generally covers a wide range of situations, including projects, property damage, lawsuits, slander, and medical expenses. However, a bond is likely to cover one area, such as liability for paying a debt.
The Best Option
While both options can keep your business dependable, the type of organization you have will determine the clients you work with and how those individuals and your establishment need to be protected. The option you select also depends on your finances and business needs.
Speak with an insurance company representative to learn more about business insurance and bonds so you can make the right choice without affecting your ability to protect your company, clients, employees, and customers.
Business owners need to make sure they protect their companies and employees by purchasing the right insurance coverage. For affordable, reliable business insurance and bonds as well as homeowners, renters, motorcycle, and auto insurance, Chula Vista residents should call on the trustworthy professionals at Altra Insurance Services. Reach out to us today to learn how we can satisfy all your insurance needs.