Surety bonds are the metaphorical superhero for consumers. They save customers from having to dig into their own pockets if negligence occurs when working with businesses. While a general business insurance policy protects a hired company and employees, surety bonds offer security for consumers. Both are equally important for a business to have, but surety bonds cover you in case of broken commitments or subpar work. As a result, doing your due diligence before hiring a company can be the difference between a great experience and a regretful (and costly) one.
While some states require various business professionals such as construction companies, appraisal management firms, mortgage brokers, and travel agents to be bonded, certain professionals are not legally mandated to purchase a bond. When looking at specialists that do not have to be bonded by law, you can still shield yourself from potential damages by making sure the company you are hiring has a business service bond.
Surety bonds should be a pre-requisite before hiring any business to work in your home or workplace. Even if a bond is not required by your state or city, it is in your best interest to hire a bonded company.
What are the advantages of working with a bonded professional?
Working with a bonded professional brings peace of mind in knowing you’re working with an individual or company that puts their customer’s interests first. Bonded businesses show consumers that their property and well-being are important to them. They are taking responsibility for their employees and looking out for the customer. A common phrase in the business industry is “the customer is always right.” However, another phrase that should be just as typical is “the customer should always be protected.” Surety bonds offer that coveted level of security.
The main advantage of a surety bond is it provides an avenue for financial reparations in cases where malpractice has taken place. For example, tax preparers in California must be bonded to the “benefit of any person or persons damaged by any fraud, dishonesty, misstatement, misrepresentation, deceit, or any unlawful acts or omissions by the tax preparer”. Without a surety bond, consumers will find it extremely difficult to recover lost funds at the hands of a careless business.
How to find out if a business is bonded
The easiest way to find out if a business is bonded is to ask the company to provide proof of their actual bond. Additionally, if the industry requires companies to be bonded for licensing, the licensing authority should have information on their website. For example, most states and/or local municipalities require construction contractors to purchase a surety bond. Therefore, the obligee (state or local department of government requiring the license) will most likely have a database where you can search for licensed and bonded contractors.
Not only should contractors obtain a bond, but other businesses such as cleaning and painting companies should be bonded as well. An optional, but crucial, bond for companies that complete their job in your home or on your property is a business service bond. A business service bond is a type of fidelity bond that protects consumers from theft. Business service bonds are a perfect example of a bond that is optional but should be purchased to establish company credibility.
Consumer protection series
For more information regarding surety bonds and consumer protection, follow along with our blog as we dive deeper into the types of businesses that should be bonded, why company professionals should purchase bonds to grow their clientele, and more.