Like insurance, bonds are an important part of risk management for businesses. While not every company needs to be bonded to round out its risk management, the industries that do rely on this process find it integral to their ability to operate soundly, in a way that protects both the contractor and the client or customer. Finding the bond you need when updating your risk management plan is a matter of knowing what kinds of bonds a provider deals in, what alternatives you have if there are any, and the value of the bond you need.
Types of Risk Protection Bonds
While there are a lot of specific bond types that can be made to order as part of an alternative risk management approach, the most common bonds for businesses are easy to remember:
- Construction bonds, including those forbids, payment, and general client protection
- Financial institution bond formats including those governing financial advisors and others with a fiduciary duty to clients
- Dishonesty bonds to protect against employee theft or embezzlement
These are broad categories that generally refer to a range of specific bond formulations and not the only ones. To learn more about the wide range of risks you can manage with bonds and how to tell when a bond will be more cost-efficient than regular insurance, you need to work with bond professionals whose experience includes businesses like yours.