Surety bonds cover a lot of ground when it comes to assuring one party of a desired outcome by another party. Fidelity Bonds protect for losses in the case of fraudulent activities by employees or named persons regarding money, securities or other property. For some, the specifics of these bonds appear quite complex. That’s why it’s important to turn to a name you can trust — like Insurance Center of North Jersey — to help you navigate the many faces of the surety bond in order to find the one that’s right for your unique situation.
We have an 80 year history of serving the North Jersey community from our home office in Hackensack. In addition to New Jersey, we also serve business and private interests in New York and Pennsylvania.
What is a Surety Bond?
There are many varieties available of this particular bond. Different varieties meet differing and very specific needs. The bond itself simply serves as an agreement between three parties that a specific act or event will happen.
For instance, the individuals and companies in the construction industry often uses surety bonds to ensure that a project, or certain aspects of a building project, will be complete by a specific, agreed upon date. If the project, or specified milestone is not complete by that date, then the surety pays the hiring party. Bonds are also used to require building contractors to build according to certain codes or standards, which can be critically important for the sake of safety.
What is a Fidelity Bond?
This type of bond is a form of protection that provides policyholders with coverage for losses that occur due to fraudulent acts or theft from designated individuals. Some examples are Employee Dishonesty Bonds which provide coverage in the event employees steal money, securities or real property. Another example is a pension plan or a 401(k) ERISA bond which covers for fraudulent acts of the plans trustees.
What Types of Surety & Fidelity Bonds are Available?
There are several different types of bonds available to businesses and individuals. These are among the most common.
- Employee Dishonesty Bonds – This type of bond protects the employer from financial loss due to the fraudulent activities of an employee or group of employees. The loss can be the result of the employee’s theft of money, securities or other property of the employer.
- ERISA Bonds – The Employee Retirement Income Security Act of 1974 (ERISA) was enacted to protect employee benefit plans (401(k) or Pension Plans) against loss by acts of fraud or dishonesty.
- License and Permit Bonds – Often required before businesses can engage in specific practices or enjoy certain privileges. Examples are contractor bonds for electricians, plumbers and other contractor specialties.
- Public Official Bonds – These bonds are requires for public officials. Examples are, notary public, town clerks, treasurers, judges and other types of officials.
- Court Bonds – Help to protect parties from losses stemming from a court decision or required by probate court. Examples of these types of bonds are, administrator, trustee. guardian and appeal bonds.
Some clients insist upon surety bonds – especially those who find certain requirements or deadlines critical for their continued success.
Who Needs Bonds?
These promise to pay bonds are generally supplied upon the request of hiring agencies, though some businesses volunteer to provide them as a show of good faith or in an attempt to sweeten a bid proposal.
Businesses that deal with government contracts are generally required to provide surety that the contract will be honored at all turns. These bonds serve to protect your customers.
They are beneficial to businesses, however, in that they do not require collateral and that they earn interest that often exceeds their premiums. If the project works out and no claims are filed, the only thing the principal must pay is the bond premium. Since the interest often exceeds the premiums, it works out well for the principle provided no claims are filed.
Why Seek Surety or Fidelity Service from Insurance Center of North Jersey?
For the purpose of bonds, it might seem a little counterintuitive to turn to an insurance provider to issue the bond. It seems to be the opposite since principles are paying to protect someone else. However, the reality is that you are insuring the reputation of your business when it comes to performance and integrity.
We have a long history of serving the Hackensack, NJ community as well as the entire state of New Jersey as a respected surety bonds provider. Our wide portfolio and in-depth expertise of bonds, including contract bonds, court bonds, commercial bonds, and fidelity bonds, provides the flexibility to meet your unique business and industry needs. What’s more, the fact that we’re an independent agency means we have many options for coverage and costs to help you get the exact products you need.