BOND INSURANCE

Valuable protection in business and litigation

legal protection for your businessA bond is a legal document that is meant to guarantee a principal’s integrity, outline an expected level of performance, or ensure a financial responsibility is met.  In simpler terms, a contract bond is a written agreement between two parties, typically a business owner and a contractor, to follow the terms of a work contract.  A court bond is also meant to protect a business owner against loss—however, these bonds are issued for use during court proceedings.

Bonds are an invaluable tool for many business owners.  They are created to guarantee that a contractor will abide by the specifications and requirements of the project they were hired to complete, or, in the case of court proceedings, that a contracted party will act in the best interests of the person or business they are representing, and that financial assets will be protected to the full extent of the law.

Contract bonds assure the business owner that the contractor will not just perform a job, but will achieve a certain level of workmanship and customer satisfaction before the project is considered “finished,” will not allow the project costs to exceed a set amount without approval, and will pay specified subcontractors, laborers, collaborators, suppliers, and partners.  By using a contract bond, you’ll protect yourself against contractors who start a project but never finish, or don’t ultimately deliver the caliber of work agreed-upon.  Similarly, using a court bond will ensure that your fiduciary will protect your assets, and that no law enforcement officer or proceeding can illegally take your assets from you.  A legally-airtight bond can save you many headaches and money down the road.

What can I expect from a contract bond?

Once a contractor is found, the contract bond writer will typically evaluate the contractor’s business to ensure that they have the talent and resources to fulfill the project, and will also require a financial background check that usually includes assessing contractor statements or income tax returns.  Some bond writing companies will even go so far as to check some of the contractor’s references.  This auditing process protects the business owner from becoming a victim of fraud, so your project can be successful.

 

Some examples of contract bonds include:

 

Bid bonds: guarantee that a contractor who bids on a job will enter into a contract if the owner awards them the work.

 

Performance bonds: guarantee that the contractor will work to the level of quality agreed-upon within the contract, and will not use lower-quality supplies than were already paid for.

 

Payment bonds: guarantees that all workers within the project– the contractor, any subcontractors, laborers, or material suppliers– will receive adequate payment for the work they provide.

 

Maintenance bonds: guarantees against defective workmanship or cheap, low-quality materials being substituted for higher-quality, paid-for supplies.

 

Please note that these parameters are only examples of what the typical customer could expect to receive for this type of policy.  Actual coverage will depend on the provider and the person being insured.  Please talk to your A.R. Davis agent to find out what type of coverage you qualify for.

What can I expect from a court bond?

Court bonds are meant to protect a business owner against loss during court proceedings.  These particular bonds are typically court-ordered.

 

Some examples of court bonds include:

 

Indemnity to sheriff bonds: protects the sheriff from a lawsuit if he or she needs to seize the property of the defendant.

 

Plaintiff’s bonds: guarantees payment of damages suffered by the plaintiff if the case is judged in favor of a defendant.

 

Attachment bonds: are required forms of paperwork that a court must possess before it is allowed to seize a defendant’s property to secure a judgment. This bond ensures that if the court decides against the plaintiff, the defendant will be paid for any damages from the attachment.

 

Replevin bonds: guarantee that seized property will remain in the same condition as it was when it was taken, and will not be sold, broken, or thrown away.

 

Probate or fiduciary bonds: requires a trustee to protect the interests of their beneficiary, and protects the beneficiary from any financial losses resulting from the trustee’s failure to ethically enforce and perform their legal duties.

 

Administrator bonds: required to protect the administration of a deceased person’s estate when they died without leaving a will.

 

Executor bonds: protects an estate against fraud or unethical treatment by the deceased’s trustee. This bond requires the trustee to divide and administer the estate in the manner it was legally willed, regardless of whether the trustee agrees with the deceased’s decisions.

 

Conservator bonds: guarantees that the conservator will be responsible for the assets and finances of a minor or a disabled adult who is declared to be incapable of handling their finances themselves.

 

Guardianship bonds: requires that a legal guardian will ethically observe and ensure their ward’s (a minor or incapacitated adult) welfare, which includes upholding the ward’s legal rights, protecting their assets and finances, and looking after their health.

Please note that these parameters are only examples of what the typical customer could expect to receive for this type of policy.  Actual coverage will depend on the provider and the person being insured.  Please talk to your A.R. Davis agent to find out what type of coverage you qualify for.

What can I expect to insure with A.R. Davis?

A.R. Davis offers comprehensive bond and contract coverage for business owners. The exact parameters of your policy will depend on the individual needs and qualifications of the business or person being covered.  Please speak to your A.R. Davis agent to find out what your policy will entail.

court and contract bond coverage
A.R. Davis provides contract and courtroom bonds and insurance