of Your Business
Protect Your Business Interests with a Surety or Fidelity Bond
Let Your State Farm™ Agent Help with Your Bonding Needs
A surety or fidelity bond can help protect the interests of your growing business. We combine the financial strength of our full service commercial surety and fidelity bond department with local agents to provide you with superior service.
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When your business is required to guarantee its performance to another, your State Farm agent has surety bond solutions to back up your guarantee that fit your needs.
Why do I need a surety bond for my business?
- As a business owner, you may need a surety bond to guarantee payment for sales taxes or utility bills.
- As a contractor, you may need to post a licence or permit bond to guarantee your work for licencing requirements with municipalities.
- Lawyers may have clients that are required to post court bonds, such as administrator or executor bonds, to guarantee their performance while distributing assets in estates.
Types of Surety Bonds
Licence and permit bonds back up guarantees that, in doing its work, your business will comply with applicable codes and regulations established by a government entity, such as a city, town, or province (the "obligee").
- Electrician's licence
- Plumber's licence
- General contractor's licence
- Driveway permit
- Sign permit
- Sales tax
Example: electrical contractors may be required to post a bond as part of their licencing requirements. The obligation of the bond may specify that the contractor will follow the electrical codes established in that city, town, or municipality.
The requirements of the bond and ordinance must be understood before the bond is written. The agent may ask you to obtain a copy of the ordinance or law that specifies the requirements and a copy of the bond, if the obligee has its own.
Depending upon the type of obligation, supporting documentation such as signatures, financial statements, and other supplemental information may be required.
Fidelity Bond Policies — Blanket/Schedule
A fidelity bond covers your business for losses due to employee theft or fraud.
Types of Fidelity Bonds
Blanket fidelity bonds provide coverage with respect to all employees of the named insured, unless specifically excluded.
- New employees are automatically covered
- All employees are bonded for the same aggregate amount
- Limit of liability applies "per occurrence" as defined in the policy
- Premiums are based on the amount of coverage requested, the total number of all employees, the business activities of the insured, and the amount of the deductible.
A blanket bond would be useful for:
- Businesses with large numbers of employees
- Businesses with frequent employee turnover
- Organizations with voluntary or honorary positions (not for profit associations)
This is only a general description of coverages of the available types of insurance and is not a statement of contract. Details of coverage, limits, or services may not be available for all businesses and vary in some provinces. All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements.