What Is: Insurance - Bonding?
Bonding insurance, or bonding, is a guarantee that money will be available to consumers who file claims against a bonded company or individual for financial losses caused by malfeasance, theft or fraud. Bonding also guarantees that, where applicable, the job performed by the bonded entity will be completed in accordance with the contracted specifications within the agreed-upon time frame. The money, or bond, is held by either the bonding company or, in some instances, a governmental agency. Many types of businesses, most notably armored car companies, janitorial services, contractors and others whose work involves access to their clients' premises, require bonding. Bonding agencies, the businesses that offer bonding, may be either local or national, and will provide premium quotes based upon the type of company requiring bonding and their vetting of that company and its employees. Bonding of individuals requires an extensive background check, as being bonded is, essentially, an indication that one is trustworthy enough to be insured up to a predetermined amount.
