Filed under: Finance,Insurance

Confusing insurance and surety bonds has been a common thing for many decades, and maybe even centuries. Surety bonds are more than six thousand years old, after all, and have been making clients feel more secure for all of that time. You should think about getting a surety bond if you are a small business, because they are great to have on hand. Many businesses don’t know how they work, though, so I thought I might throw out a few words and try to shed some light on all that surety bonds can do for you.

First, surety bonds are not insurance. You pay insurance premiums monthly. You pay a percentage of what the surety bond is, depending on the company, but then have to pay the surety bond company back if they ever have to fix a problem you caused. For this reason, surety bonds behave a lot more like a line of credit than as insurance. If you have an insurance claim, you never have to pay that back, tho your insurance payments may go up.

So how do you go about getting a surety bond? Isn’t it a lot of red tape and hassle to go thru to get a surety bond? Well, this has been the case for a long time, but now things can be different. There are some great surety bond companies out there who have made it a lot simpler to get a surety bond.

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