Bonds and Insurance Blog

BF Bond has streamlined the surety bonds application process and is now offering this remarkable service online to clients in all 50 states

New York, NY (IPRWIRE) Tue, Jan. 30th, 2007 — Bernard Fleischer and Sons / Advanced Insurance Services (www.bfbond.com) is pleased to announce their new streamlined surety bonds application, which is now available online.

By developing and refining the surety bonds application process, they have been able to remove the usual complications and added work that most applications require, therefore making it much easier and faster to secure the needed instruments, often at a lower cost to the customer.

William G. Fleischer, president of the company, recently stated: “The bonding industry did not take a personal approach to its customers, often overlooking the problems that these people were experiencing in obtaining surety bonds. We have had meetings with Consumer Affairs, courts, attorneys, and underwriters from several top bonding companies to break this miscommunication and lack of understanding between the company and the customer, which has resulted in our ability to provide personal attention to both parties. Because of our streamlined process, we can often complete the process in one day.”

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The main type of bonds on the market today are known as surety bonds. These bonds are required by anyone who administers public or private funds, or for individuals or businesses that require licenses or permits in order to operate in their trade, profession, or business. This includes a long list of licensed trades people, agents, and others who are in a regulated profession or business.

These bonds can be viewed as like a third party contract. An insurance company or bonding company acts as the guarantor or surety for one individual or business. This individual or company then performs a service and is known as the obligee. They assume the responsibilities of liabilities of a third party that is known as the principal.

To give an example of how this works, say a taxi cab company wants to open a business in Sun City. They go to the county office and fill out the necessary paperwork. They are also told that they must provide a form of surety to protect the county from any liabilities or damages that the taxi cab operator might incur. The taxi cab company goes to a bonding company, who provides the necessary bonds. In this example, the bonding company is the surety, the taxi cab company is the obligee, and the county is the principal.

Surety bonds play an important and ever increasing role in today’s business environment. They allow the risks and liabilities to be managed and controlled in a way that doesn’t prevent individuals from entering into any number of worthwhile professions and businesses. They protect municipalities and their officials from the liabilities and actions of individuals and business owners, and they protect the consumer by ensuring that only licensed businesses operate in areas where there is great potential for human and financial catastrophe.

There are many other different types of surety bonds, and some of the major ones are used by the court system to process criminal cases and allow appeals. If there are no bail bonding processes, then the courts quickly clog up and there is no space to hold all of the defendants who await trial under court or appeal bonds.

In construction, these bonds are often used to ensure compliance with local or municipal by-laws or regulations, or to cover the city in the case of damages and liabilities that might arise in the construction or demolition period. They are also used for specific events or activities related to construction such as drilling, blasting, or even the closure of streets and sidewalks.

Any activity that requires a permit by city or county officials will almost always come with the condition to post surety bonds and liability insurance. In the case of any special or public event, this is to indemnify the city from any damages or liability that may occur in the course of these events. Until they receive this assurance, they are unlikely to allow the event permit to be issued.

Contact www.bfbond.com to learn more about the many bond services that can help you and your business succeed.

Fidelity bonds are like a kind of insurance policy for employers and companies that serve to protect the ownership and management of a business in the event that any of their employees steals monies, misappropriates funds, or acts in a dishonest fashion that ends up causing the business to suffer a financial loss. These types of bonds cover acts of theft, forgery, and embezzlement of funds that are the responsibility of the employee or placed within their care. These types of security are not liability bonds and do not apply to a series of other work related costs and damages including: employee mistakes or errors, poor or shoddy performance or workmanship, accidents at the workplace, and on the job injuries.

One common type of fidelity bonds is an ERISA bond. This is a form of bond whose name comes from the Employee Retirement Income Security Act (ERISA). The ERISA legislation was passed in 1974 to provide protection for employee benefit and pension plans. One requirement of the ERISA legislation is that businesses that currently operate a registered employee benefit or pension plan must obtain a bond or surety in the amount of ten percent of the worth of the employee benefit plan. In accordance with the overall purpose of the ERISA legislation, this provision is to protect employees and their benefit plans against inappropriate or illegal actions that may be taken by employers in the management and operations of these benefit plans.

Another popular form of fidelity bonds are criminal insurance bonds. Their main purpose is to protect business owners against deliberate criminal acts on the part of their own employees. These types of bonds do not replace the need to closely screen new hires for criminal backgrounds, but they do provide some measures to allow the business to recoup any such financial losses which may occur later.

Fidelity bonds may not be able to guarantee that employees won’t bite the hand that feeds them by stealing from their employers, but they are a useful tool for management of a company to use as part of any employee anti-theft program. This anti-theft program should also focus on two other main areas. One is to ensure that the people who walk in your front door as employees are not likely to walk out the back with your products, goods, services, money, or corporate information.

The second is a firm and unwavering policy to severely punish employee theft, regardless of whether that theft occurs in the warehouse or the executive boardroom. This policy should be well known and well publicized to employees as part of an introduction or orientation to their new workplace. They need to know that theft of any of the employer’s belongings or property will bring swift discipline that might include dismissal for a first offense. These programs, along with sureties and insurance, can help to protect not only the employer’s property, but the integrity and honesty of all employees.

Contact www.bfbond.com to learn more about how to insure your business properly.

8. The contractor’s liabilities should be listed seperately.
(a) It is important to realize that every contractor doing some
work has liabilities. Thus, if he says he owes no money, the
underwriter is skeptical.
(b) Material houses listed as creditors should be interview, in order to learn if the contractor owes what he says he owes. To see if he pays on time, earnes discount, pays satisfactorily, or pays slowly
Several materal houses should be interviewed, because sometimes people are anxious for a contractor to get a job, so he can liquidate an account that is worrying the material house.

6. Real estate should be described fully, stating the kind of
improvements, whether farm land, subdivision, city
lots, buildings, dwellings. If the property producers an
income, amount should be stated. Often the contractor ownes
property jointly with a spouse or has real estate in the spouses
name. If incorporated, corporate asset, such conditions dictate
indemnity of spouses needed.
7. List all of the larger pieces of the contractors equipment. Give
type, model, & capacity of each piece. Advise cost, date of
purchase, present value. If the contractor rents special
equipment, ascertain from whom he will rent, per deim of
equipment.

Question: What is contractor’s financial resources?
1. Obtain a full financial,personal and business. See that it is dated.
2. Verify statement with the bank, see if the average bank balance
over a period of six months or a year approximates that shown
in the statement. If it varies greatly, why?
3. Stocks and bonds should be listed and described specifically, so
their value can be ascertained from market quotations.
(a) Any unlistedsecurities should be given special treatment, so
that the underwriter will be able to give them full value in
estimating the contractor’s true net worth.
(b)If any security is pledge as collateral, this fact must be noted
in the underwriting memorandum accompanying the
statement.
4. List each account receivable seperately. The name of the debtor
should be given and the date when it is due or in the event it is
overdue, the date it is expected to be paid. Any receivable that is
withheld until completion of work, or during a maintenance
period, should be noted, giving the dates that the money’s are to
be released to the contractor.
5.The inventory should be divided into two classes:
(a) That part of the inventory that can be used in the contract
under consideration. This is a quick asset.
(b) All other material that does not have a ready market should be considered as a fixed ( or slow ) asset

Question, what is meant by what is his credit at the Bank?

How much can he borrow? How much has he obtained in the past? If a corporation, do the principal officers endorse the corporation’s notes?
Does he furnish collateral? If so, what kind?

What is the name and location of the bank? Name of bank Officer?

What is the process needed to apply for a Bid & Performance bond?
Upon contacting us, an application will be sent, which will give the necessary information for the underwriter to know who you are and where you are coming from. It is impossible to give too much information regarding a contractor. Everything the contractor does should be given to the company. His ability as an estimator can be determined by sending the company the list of bids submitted on all bids. Newspaper accounts of work, pictures are always helpful.

The following outline should be followed in the submission of the first contract bond, or with the first filing of the financial statement:
How is the contractor fitted for his business:
1 How old is he?
2 How long has he been in business?
3 What kind of work has he specialized in?
4 List the three largest contracts he has completed since he has
been in business for himself.
5 Is he a careful estimator?
A) Does he do his own estimating, or does he have an estimator?
If so, give the estimator’s experience.
B) Who checks these estiates?
6 Does he keep careful accounts, does he keep his own books, does
his wife do it, or does he have an experenced bookkeeper?

The council for Minority Business Development asked us recently if we would be able to provide Performance and Payment bonds. We are pleased to state the answer is yes in most cases.

The reason the bond amount is based on the size of the personal property is that in most states, administrators have nothing to do with the handling of real estate, unless there are not enough funds or personal property to pay claims. Real estate cannot be conveyed without authorization to post additional bond by the court, based on the expected proceeds from the sale of real estate