How do you get "bonded"?

[efhughes3]

If one were to start a business, and wanted to say they were "bonded", how would they do that? Is it some kind of a "title search" on a person to make sure there are no skeletons in the closet? Who does this, and what does it cost?

[livi]

Sorry, I misread the subject title. Thought it read: 'How do you get boned ?'

[gaijindabe]

What does it cost? Depends on the kind of business you are in. A salesman for Van Cleef and Arpels? Well you may be traveling with $50 million in jewelry.

Basically and insurance policy on you and certain employees - to pay up if you don't do what you are supposed to do.. I imagine a background check would be in order. At least criminal and financial.

[efhughes3]

Basically I'm thinking of a business that would have me exposed to clients' "collector cars". I would imagine that having the "Bonded" on the business card would be advantageous, if not essential to success.

So do I go to Allstate or similar for this?

[cashflyer]

I used to be bonded, so this is based on my individual experience in the State of South Carolina.

Bonded means that you have a "Surety and Fidelity Bond". But there are different types of S&F Bonds: contract, court, license, permit, commercial.... etc. It's basically a type of insurance that is guaranteed by a pledge of your assets.

First, look in your local yellow pages under.... "Bonds - Surety and Fidelity". Start phoning them up.

If they are professionals, they will know from your description of your needs exactly which type bond you need.

When I applied here in SC, there was no background check - only a credit check. Then they had me list my assets and net worth on an application. This is the stuff they seize if they ever have to pay out on your bond.

Bonds are priced based on the amount of coverage. The premium can be annual on smaller bonds like mine ($50k) or can usually be split into quarterly payments on larger bonds.

ymmv

[Dantilla]

Usually purchased from an insurance company. Your agent will be able to send you the right direction.

I used to have a general contractor's license that required a $6000 bond. I put $6000 cash in an "Assignment of Account" with the state as the beneficiary. It was in an interest earning CD, and the interest was enough to cover the premiums for my liability policy, so I basically had my contractor's license for free.

The rules are much stricter now for construction here in Washington State, with much higher liability limits, but that is still one possibility if you have the cash neccessary to cover the bond.

[M.D. Holloway]

Ed,
Let me know what you find out. I recently established an LLC for my writing and seminars. You may want to form one as well for protection and bill payment, collections and write-offs.

[JeremyD]

Incorporate - then insure - poof - "bonded"

Of course some place require specific levels - like $1M General Liability - $3M umbrella coverage - It just costs money.

[efhughes3]

Thanks guys, I would definitely go the Inc or LLC route, but I've never really known what bonded meant.