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Two Types of Bonds : Fidelity Bond vs Surety Bond

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So what’s the deal with fidelity bond vs surety bonds . Aren’t they pretty much the same thing ? Well my friend let me break it down for you . By the end of this you’ll have a clear picture of which boat you’re in.

Let’s See Fidelity Bond vs Surety Bonds

Fidelity and surety bonds are the big players in the world of corporate bonds . Here’s the scoop : a fidelity bond is all about guaranteeing the person while a surety bond guarantees the performance . In simple terms a fidelity bond is like a personal insurance policy while a surety bond is more about getting the job done right .

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Trust and Responsibility

Now here’s where it gets interesting . Fidelity bonds cover positions of trust while contract bonds fall into the surety bond category . Back in the day they were both referred to as corporate surety bonds but let’s not dwell on the past.

But Hold On There Are Exceptions .

Now you know how life loves exceptions right ? Well the same goes for bonds . There are some cases where the general classification I just gave you doesn’t quite hold up . The exceptions can be plenty and sometimes it feels like they’re about to take over the rulebook . But hey it’s good to know the general idea still stands most of the time.

When the Law Steps In

Now there’s a bunch of bonds that the law requires . If we’re talking about contract bonds related to the government federal , state or municipal then you better believe they’re mandatory . And don’t forget about the Little Miller Acts which make bonds a must have for federal jobs.

But that’s not all . If you want to serve as an administrator , guardian , trustee , executor or in any other position involving legal transactions (think probate situations) you’ll need a fidelity bond . Oh and let’s not forget about public office you need a bond for that too . Certain specialized lines of business like selling cigars , tobacco or liquor also come with a fidelity bond requirement.

When It’s Not the Law Why Bother ?

Now here’s a question you might be asking  If a bond isn’t legally required why the heck would I bother getting one . Well my friend the obvious answer is this if you want the job and it requires a bond you gotta get one . Simple as that.

But there’s more to it than just checking off a box . Bonds provide stability and assurance . They make transactions smoother by offering a safety net in case things go south . Think of it this way bonds help prevent problems like funds disappearing into thin air , bankruptcy or even unfortunate events like death or disability . Having a bond in place shows that you’re trustworthy and reliable even if perfect information isn’t available.

The Role of Fidelity and Surety Bonds

Fidelity bonds and surety bonds are like the unsung heroes of commerce . They keep the wheels turning by providing stability and protection . Fidelity bonds make sure people in positions of trust don’t take advantage while surety bonds ensure that jobs get done properly . Both types of bonds contribute to a reliable business environment giving peace of mind to everyone involved.

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