There are
some fears and pains that accompany a small business when first starting it
besides the excitement accompanying it. The best move that you can take is to
ensure that your bonded and insured in order to secure your company. Plenty of
brand-new players in entrepreneurship listen to these terms, but do not exactly
know what it means or where to acquire them. You see, it is nothing to worry
about--we will put it in plain, easy, understandable language so that you do
know.
What Does
Bonded and Insured Means?
here is a
quick definition of the individual terms before we crack on to the process:
• Insured: An insured relates to the
fact that your company is covered in some cases, such as property damages,
accidents, legal suits or injuries of employees. Should an event that is
unforeseen occur, insurance is used to pay the insurance expenses.
• Bonded: That is to say you have
purchased a kind of a sure appeal bond that serves as a guarantee to your
consumers. It reveals that your business is reliable and the bond will replace
monetary atrocities in case you cannot carry out a task or fulfil your
commitments.
In short a Insurance protects YOU and
a Bond protects YOUR CUSTOMERS.
The need
to have small business be bonded and insured.
Being bonded
and insured does not mean merely putting a check-box, but it is a process to
establish trust and confidence. The following are reasons as to why it is so
important:
1. Customer Trust: The customers are much
safer when they hire a bonded and insured business.
2. Legal Requirements: According to
requirements of laws, some industries or states necessitate bonding and
insurance.
3. Financial Protection: Insurance works
in protecting you against big financial losses of collecting accidents,
lawsuits, or losses.
4. Business Contracts: In addition to
numerous commercial contracts, a certain number of them demand evidence of
bonding and insurance.
5. Professional Reputation: Being bonded
and Insured demonstrates your seriousness in corporate business and also our
clients.
This is done by first finding out what you need to be covered.
Not all the
small business requires the basis of similar types of insurance or bonds. The
nature of the work will decide what is necessary.
• In the case of service companies (cleaning,
plumbing, electricians): Liability insurance and surety bonds.
• In case of retail businesses: General
liability + property insurance.
• To contractors and construction
companies: Surety, liability insurance and insurance on worker’s compensation.
• Professional services (consultants,
agencies): Professional liability insurance (errors and omissions).
Check the industry or states regulations to
identify the specific needs a little research.
Step 2:
Take out Small Business Insurance.
That is how
to get insured in a hurry:
1. Calculate Risks: Plot the largest risks
in your business (destruction of property, injuries to customers, litigation).
2. Choose Coverage Types:
o General Liability Insurance is an
accident, injury, and damage insurance.
o Property Insurance - insures your
equipment, office or inventory.
o Workers
Compensation - this covers employee medical expenses as a result of work
related injuries.
o Professional Liability (E-O)- insured
against errors or negligence lawsuits.
3. Get Quotes: See local insurance agents,
or use in online quotes: State Farm, Hiscock, Progressive.
4. Choose the best policy: Consider both
the insurance limits as well as the price but not only the lowest one.
5. Always have Certificates at Your
Fingertips: Clients will demand evidence of insurance.
Step 3: Have Your Business Bonded.
Similar to
the process of insurance is the bonding process whose work is different:
1. Know the Bond Type You Need:
o License
and Permit Bonds - required by states to certain businesses (such as
contractors).
Performance Bonds Per the eBook, it
was published in 2014 and has 348 pages, known as the performance bond, which
promises a project to be completed.
o Janitorial or Service Bonds- insure
customers against theft or damage.
2. Get a Wesure Bond with a Bonding
Company: You can request an application with a Bonding Company, such as
SuretyBonds.com, Travelers, or Liberty Mutual.
3. You Pay the Bond Premium: This is a
small percentage of the price of the bond (e.g. 1-3%).
4. Get Your Bond Certificate: Use it as a
record of receipt to the customers or the contracts.
Steps 4:
Promote Your business as Bonded and Insured.
When You
have gotten everything set, do not hesitate--get it out!
• Place your business cards and
reputations the phrase licensed bonded and insured on your web site.
Mention it
on advertising so that it demonstrates credibility.
• Display your certificates to the
clients when necessary.
This will
provide you with an enormous competitive edge since the customers will have a
higher likelihood of trusting a business that operates with a provider of
financial insurance.
What is
the cost of Bonding and Insuring?
• Insurance: depending on the industry
and risk, small business insurance may occur between 500 and 3, 000
a year.
• Bonds: Surety bonds can range between
1% -10% of the count of a bond. As an example, a fifteen thousand dollars’ bond
could cost you between 100 and 500 a year.
Money saving tip: You can save money by
combining insurance policies with a single company.
Frequently
Asked questions: Bonding and Insurance of Small Businesses.
Q1. Are
there any small businesses that require bonding?
There are
no, just certain industries that need a bond (such as contractors or building
cleaner services). However, client trust increases with having a bond.
Q2. Would
bonding be similar to insurance?
No--insurance
secures your business, unlike bonding which secures your customers.
Q3. Do I
have a chance of being bonded without insurance?
Yes, both is
taken to protect more businesses.
Q4. What is
the quickest bonding and insuring process?
The majority
of insurance policies and surety bonds may be given out with just a few days.
Q5. Will the
clients bother on whether I am bonded and insured?
Absolutely!
Most of them will not even think about employing a business without it.
Final
Thoughts
You might be
thinking that becoming bonded and insuring your small business can be a
difficult process, yet it is probably easier than you think. It is not only
that it safeguards your funds, but also fosters trust with your clients and
allows garnering additional contracts.
To keep in
mind: Insurance insures your business. Customers are insured by bonds. They
united by enhancing your small business and providing protection and
professionalism to your company.
Therefore,
it’s time to get down to business--bonded, insured, and get yourself a good
night rest, when it comes to expanding your business.
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