What are fidelity surety bonds, and why does your business need them? Fidelity bond insurance can protect your business against dishonest acts by your employees, damage or loss if a contract is not fulfilled, dishonesty by those who administer pension plans, and more. Surety Bonds can protect you against tax liens against your business, or to guarantee payment of utility bills. There are differences between fidelity bonds and surety bonds. Some kinds of fidelity bonds include:
Fidelity bonds for pension plans. The law requires you to have a fidelity bond equal to at least 10% of the assets of a defined pension plan. The maximum required amount is $500,000 or $1 million if a plan holds employer securities. The bond must be in the name …show more content…
This covers all of your employees, unless one or more is specifically included, as well as all new employees. All of your employees would be bonded for the same aggregate amount. The limit of liability would apply "per occurrence," and the policy will define this. Your premiums would be based on the amount of coverage you request, the total number of your employees, your business activities, and your deductible. This bond is often used by organizations with honorary or voluntary positions, such as in not for profit associations, businesses with frequent employee turnover, and businesses with large number of …show more content…
They involve three parties:the party required to perform (called the'principa'), the party who insures the action of the principal (called the'suret'), and the party for whom the work is being done (called an'oblige').Some kinds are:
License and permit bond. This promises the covered business will comply with state regulations and codes, usually established by a town, city, or state. Permit bonds grant a privilege. Some kinds include plumber's license, electrician's license, driveway permit, sign permit, and sales tax. As an example, a plumber might have to post a bond to be licensed, and he will have to promise to follow all the laws in a state, town, or city. Contract surety bonds. If you are a supplier, contractor, or , manufacturer, you may be contractually obligated to maintain a surety bond to guarantee your performance. You may need to obtain a surety bond as a part of your bid process. You will have to pay the municipality if you fail to complete the contract. The municipality will use the money to pay another contractor to finish the job. Tax bonds. If there is a tax lien on your property, you can get the IRS to release it by posting a bond. This must be done within 30 days of IRS acceptance of the
Fidelity bonds for pension plans. The law requires you to have a fidelity bond equal to at least 10% of the assets of a defined pension plan. The maximum required amount is $500,000 or $1 million if a plan holds employer securities. The bond must be in the name …show more content…
This covers all of your employees, unless one or more is specifically included, as well as all new employees. All of your employees would be bonded for the same aggregate amount. The limit of liability would apply "per occurrence," and the policy will define this. Your premiums would be based on the amount of coverage you request, the total number of your employees, your business activities, and your deductible. This bond is often used by organizations with honorary or voluntary positions, such as in not for profit associations, businesses with frequent employee turnover, and businesses with large number of …show more content…
They involve three parties:the party required to perform (called the'principa'), the party who insures the action of the principal (called the'suret'), and the party for whom the work is being done (called an'oblige').Some kinds are:
License and permit bond. This promises the covered business will comply with state regulations and codes, usually established by a town, city, or state. Permit bonds grant a privilege. Some kinds include plumber's license, electrician's license, driveway permit, sign permit, and sales tax. As an example, a plumber might have to post a bond to be licensed, and he will have to promise to follow all the laws in a state, town, or city. Contract surety bonds. If you are a supplier, contractor, or , manufacturer, you may be contractually obligated to maintain a surety bond to guarantee your performance. You may need to obtain a surety bond as a part of your bid process. You will have to pay the municipality if you fail to complete the contract. The municipality will use the money to pay another contractor to finish the job. Tax bonds. If there is a tax lien on your property, you can get the IRS to release it by posting a bond. This must be done within 30 days of IRS acceptance of the