A lot of people we talk to call in saying they want to be bonded.  The story is typically the same, they are opening a company, and all of their competitors advertise that they are bonded, so as to not be at a disadvantage, they want to be bonded as well.  The story ends with the caller asking, ‘What do I have to do?”

Typically the caller is a little confused on what a surety bond is, they simple googled “bonded”, and bunch of bond agencies appear.  A surety bond is a three party agreement that guarantees something, in this system the obligee is requiring the principal to obtain a surety bond.  Typically the obligee will provide a bond form that should be used.  A surety bond guarantees services such as construction or electrical contracting and licensing required by the government.  In these cases the bond is guaranteeing that these services will be completed and done so in a proper manner.  Bonds are specific to job license or project.

E&O insurance is very similar to a surety bond, but provides more blanket coverage.  Errors and Omissions provide financial protection performed or not performed.