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You have probably seen signs or advertisements, often for small businesses such as an electrical or construction contractor, proclaiming that the company is "licensed and bonded." But what exactly does it mean to be "bonded"? To clear up the matter, 1st Choice Insurance, the leading bond insurance agency in Fairfield, OH, explains what bond insurance is and why you might need it.

What Is a Surety Bond?

Surety bond insurance is a financial instrument in which an insurance company guarantees the performance of a task, whether it's to pay a debt, appear in court, buy auto insurance, or comply with a contract. Many small businesses purchase surety bond insurance to protect their customers' interests and show clients they’re trustworthy and reliable.

Surety bonds give customers recourse if they feel they were wronged. For instance, if an employee of an office cleaning service steals from a client, the client can file a claim against the cleaning company's surety bond, which protects both the interests of the company and its customers. However, not all surety bonds are business related.

What Types of Surety Bonds Are Available?

There are about 25,000 different types of surety bonds. Some of the most common include fidelity bonds, business service bonds, contract bonds, and SR22 insurance bonds, which are required for high-risk drivers in many states.

Fidelity bonds protect a business against fraud or embezzlement by employees trusted with handling money. Business service bonds, discussed in the cleaning service example above, protect clients against employee theft or dishonesty. Contract bonds protect customers if a business fails to meet its contract obligations. Bail bonds ensure a defendant will appear in court, and SR22 insurance bonds are documents filed with the bureau of motor vehicles guaranteeing that a driver has adequate insurance and is up-to-date on payments.

1st Choice Insurance, the most experienced seller of SR22 insurance in Fairfield, OH, can help you choose the right type of bond insurance for your business or personal needs. Visit their website to view contact detail and call (513) 860-0666 for more information on bond insurance or to request an auto insurance quote.

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