What’s a Bond?
Here is another one we get asked about a lot: “I understand that you are licensed and bonded. What does bonded mean?”
Ok, let’s discuss three different areas that might help you understand what a bond is. A bond is like a guarantee of being covered for a certain amount via a loan.
You do not get a discount because you have never had a claim. Bonds are meant to never be used. It is not insurance, and if you ever have to use the bond, there is a good chance you will never get a bond again.
Bonds are not cheaper the longer you have them. Premiums will not fluctuate often. There are very strict rules governing bond issuers in each state and the paperwork is extensive. Reviews will not happen unless there are changes to the business itself.
A bond does not cost the bonded the full amounts, most only have to pay a premium. Some will have to assure the bond with 100% collateral, but only in a high risk performance bonds situations.
I hope this helps clear up some of the questions of a bond and what it means. Thanks to JW Bond Consultants, who were instrumental in educating and instilling confidence in us on the bond process.
December 5th, 2007 at 9:23 am
Well, Maybe bonded means selected or whatever, Your meaning is also kool.