BONDS
Bonds are typically distinguished between Surety Bonds, which guarantee the performance of a contract, and Fidelity Bonds, which protect against the dishonesty of employees or persons occupying positions of trust. The rest of bonds fall into the miscellaneous category.
There are hundreds of bonds that CCI Underwriters Insurance Agency can write, but we have selected a sample of the most commonly used ones. Select a bond to read a description of it. If you are interested in finding out the price for one of these bonds or any other type of bond you need for your business, then please contact one of our agents.
The agents at CCI Underwriters will help you decide whether you need bonds for your business. It is important to understand that bonds are not insurance. A bond is a three-party contract where the bonding company (surety) guarantees that the company that buys the bond (principal) will fulfill the contract or obligation stated in the bond or else the company that buys the bond (principal) will pay the entity that suffered the loss (obligee). If you have any questions about bonds and the bonding process, please contact our office.
Bid bonds are used if they are required to accompany a bid for a contract that will require the successful bidder to furnish additional bonds if awarded the job. The guarantee with this bond is that if the bid is accepted, the bidder will enter into contract and will satisfy further bonding requirements.
The agents at CCI Underwriters will work with you to pair your company with a good surety company to back up this bond. If a bid bond is required for a bid you are working on, then contact our office. The bond works so that if the obligee awards the contract and the bidder refuses to perform the work (for example, because of an error in bid calculation) or furnish the additional required bonds, the bid bond will guarantee to the obligee payment for the difference between the amount of that bid and the bid of another which is accepted. The bid bond is provided by the surety which will ultimately furnish the additionally required bond. Thus the surety underwrites the bid based on the concept that it will eventually have to “bond the job.”
Contract Bonds are written to guarantee the fulfillment of a contractual obligation. They are most commonly used for construction projects and for the supplying of goods. There are many types of contract bonds, of which the most common are bid bonds, performance bonds, payment bonds, and contractor’s performance bonds. Other types include maintenance bonds, subdivision bonds, and supply contract bonds Contract Bonds are commonly required by law on construction work for public bodies and not often seen in private construction work. The reason is that the cost of the bond will be added to the contractor’s price. Regardless of what type of job it is, the agents at CCI Underwriters can help. If you need a contract bond for a job, then please contact our office. We have the ability to work with your needs and get a bond that covers your contract
The contractor's performance bond was created for contractors and combines the performance bond and the payment bond. This bond guarantees the performance of a contractor as specified in the underlying contract as well as the payment of labor and material bills.
Today's construction industry is more competitive than ever and more project owners require that their contractors provide them surety bonds guaranteeing their performance of the contract and payment to certain subcontractors and suppliers. Our bonding experience with many contractors throughout Minnesota allows us to provide unique bonding solutions directly and expeditiously for our clients. We understand your business and your financials and we have earned the trust of several bond companies to best service your needs…
License Bonds are compliance bonds assuring the obligee that the principal will conduct business in a normally acceptable manner and/or according to specific written standards such as a building code. An example of this type of bond is the Motor Vehicle Dealers Bond.
Payment bonds guarantee that the contractor will pay all labor and materials for a project upon completion of the work. This assures the obligee there will be no mechanic’s liens or similar problems after completion. A payment bond is generally required when a performance is needed and they are frequently combined into a single instrument known as the contractors performance bond.
Permit bonds are like license bonds except that they deal with the requirements to get a permit for a specific function rather than continuous operations. Examples of functions that could require a bond in order to get a permit include putting on an athletic event or an exhibition, putting up a new sign, moving a building, or cutting down a tree.
The business services fidelity bond provides protection against financial liability for the loss of a customer's money, securities, and personal property caused by dishonest acts of the employees of the insured while on the customer's premises upon conviction. Limits for this coverage range from a minimum of $2,500 to a maximum of $100,000. Some of the more frequently requested bonds are for subcontractors, temporary employment agencies, home health care, janitorial and security guard services.
Here are two examples of how the bond could work for your business:
1.) You have a cleaning service. An employee, while working in an office, notices some valuables in a drawer. After finishing work the employee puts the valuables in his pocket and leaves.
2.) You are a subcontractor. On the job site, your employee notices some electronic equipment he could use. When no one is looking he puts it in a box and takes it out to his truck.
Beyond protection from liability for employee dishonesty, having a Business Services Bond can give you an important competitive advantage. Being able to say, "Our people will be bonded for honesty while on your job" could make a difference in whether a job comes to you or goes to someone else. Your business can also utilize the Business Services Bond as a marketing tool in advertisements and proposals. Please contact our office for more information on this bond and for a quote to protect the services of your business.
The small business fidelity bond protects you from loss incurred by dishonest acts of your employees. Losses resulting from dishonesty of bookkeeping services are also covered. This bond is available in limits of $5,000 and $10,000. Larger limits are available through the standard commercial fidelity bonds.
Special Fidelity bond coverage is now available for almost any kind of small business that previously found insurance difficult to obtain. Examples are cafes, gas stations, retail stores, businesses with sales people who make collections, and other businesses where cash is handled by numerous employees. The agents at CCI Underwriters will assist your business in acquiring the bonds you need through the bonding companies we represent. Please contact our office for more information or to request a quote on any of the bonds listed on this website or any others that you are required to carry.
Commercial fidelity bonds protect the employer against losses caused by employee theft the same way a small business fidelity bond would, but it provides larger limits of standard fidelity coverage up to $500,000, and can supplement the policy with depositors’ forgery coverage.
Many officials elected or appointed are required by law to furnish an official bond before taking office. This is known as the Public Official Bond and it can also be used to provide coverage for individuals on a scheduled or blanket risk basis.
Blue Sky Bonds are required of investment companies, and guarantee against the company misrepresenting securities and defrauding the public.
Self-Insurance Bonds are used to provide to an authority as evidence of compliance with an insurance requirement. The most common example is a larger employer who is self-insured for worker’s compensation or auto liability, to show compliance with state law and guaranteeing financial responsibility to respond to obligations.
ERISA (employee retirement income security act of 1974) requires that every fiduciary of an employee benefit plan and every person who handles funds of such plan shall be bonded in an amount equal to 10% of the funds handled with a maximum Bond Limit of $500,000.