Bid bond is issued as part of a bidding A bid bond is important to show proof of guarantee to the project owner that you can comply with the bid contract and also that you can accomplish the job as laid out in the contract. A bid bond is a guarantee that you provide to the project owner stating that you have the capability to take on and implement the project if you are selected during the bidding process. Normally, project owners do not know if a contractor is financially stable or has the necessary resources to take on a project. However, because of a bid bond, they will be more comfortable to award a project to a contractor knowing that if the project fails, they can collect compensation from the surety bond.
Court Bond also known as fiduciary bonds; guarantee the performance of fiduciary services in compliance with a court order. (e.g. Guardianship Bond, Executor Bond, etc.)
ERISA Bond or Pension Bond-The Employee Retirement Income Security Act is a federal law enacted in 1974. ERISA established minimum standards for plan administrators and investment advisers to protect employee pension and health plans in the private sector. ERISA requires that plan officials who manage, oversee, recommend or handle funds or other property of an employee benefit plan must be covered by a personal fidelity bond, the U.S. Department of Labor explains. If a plan official commits fraudulent or dishonest acts, his bond ensures that the pension or health fund can recover some of its losses. The bond only pays if the fraudulent administrator is financially unable to meet his obligations.
Surety Bond or Performance Bond is a promise to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal’s failure to meet the obligation.
Fidelity Bond or Employee Dishonesty Bond– A fidelity bond is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees. Fidelity bonds come in two types: first-party and third-party. First-party fidelity bonds protect businesses against intentionally wrongful acts (fraud, theft, forgery, etc.) committed by employees of that business. Third-party fidelity bonds protect businesses against intentionally wrongful acts committed by people working for them on a contract basis (e.g., consultants or independent contractors). In business partnerships, it is the responsibility of the business working as a contractor or subcontractor to carry third-party fidelity bond coverage, though it is typically the other party who requests or requires such coverage. In many cases, businesses in finance or banking require their contractors to carry third-party fidelity bond coverage to prevent losses from theft.
The Armstrong Company Insurance Consultants has the capacity and experience to provide a full range of surety bonds. We have over 40 years of experience with a variety of clients. We welcome the above lines of bonding and if it falls outside these general categories we will try to find a solution for you there also. Contact us, to find out more.