Making a written contract is the only way to protect all the interested parties in any business collaboration. While they are often strong enough to force everybody to do what they have promised, sometimes additional bonding features have to be applied. So, if you want to have things done in an efficient and expedient way, insisting on surety bonds is the most comfortable solution.
Who actually benefits from sureties?
The most common entities that insist on surety bonds are government agencies and other public authorities. What they need is a fast and reliable service. Since local councils and national governments are constantly in the public eye, they have to justify the trust they gained from the public. This is the main reason why they opt for this kind of legal protection. When they apply a bonding policy, they are not directly responsible for anything. For instance, if a government agency wants to hire a private company to work on a project, they contact a surety agency. In this business triangle, the government is called the obligee, the hired company is the principal and the surety agency is the guarantor. If the principal does not do what they agreed to, the obligee will get their assets back from the guarantor. Finally, the guarantor will reimburse those assets from the principal. That way private businesses are forced to fulfill their business promises.
Higher level of trust
Although such a concise explanation sounds harsh, this type of business bonding eliminates any surprises from a business relationship. If something is more than necessary in these insecure business times, it is trust, even if it is elicited in an artificial way. The interested parties that accept the rules set by surety bonds can work in a smooth and relaxed way. Everybody knows that they have protected their assets and public reputation, which are two essential features for every business enterprise. This is why it is recommended to startups to use different bonds for the sake of their own protection. For example, you can get employee theft bonds if staff members deal with your customers’ money. Those bonds function as a disclaimer that protects you from your workers’ wrongdoings. Moreover, the customers will trust you more if they see that you care about their protection.
In-house fidelity bonding
Those employee theft bonds are somewhere in the middle between surety bonds and fidelity bonds, since they protect both you and your customers. On the other hand, fidelity bonds are here to ensure that your business is not damaged in any way whatsoever by your own employees or business partners. They can help you protect your business premises, your assets and business future from frauds, tricks and cons. You can introduce a blanket bond that will cover all your employees or individual fidelity bonds, which are designed to include only some of your employees. Your choice will depend on the type of the business and your employees’ responsibilities.
However, do not get confused when it comes to fidelity bonds. Their main role is to protect you from the inside damage. But if you want to insure your business, you have to contact insurance companies and see what types of business insurance (ili: http://www.thesimpledollar.com/how-to-insure-your-home-business/) you might need.
While having faith in people and trusting them is a great characteristic, business demands a more serious and less romantic approach. When companies are legally bonded and aware that any delay or a deadline break will cause a financial loss, they never behave in a foul or irresponsible way. As surety and other bonds have proven to be practical solutions, every business should use them to increase their productivity.