Originally posted by jayandlo
My husband and I are new to the business and we had a potential client ask us to become bonded. How is this done? Cost? Etc.
A bond is generally issued by your insurance company. The fee is based on the amount of the bond. The bond is to insure performance (generally). In other words, if you have a contract to perform services (generally in a construction type scenario) if you do not complete the contract, the bonding company will cover the cost of having someone else complete the contract.
Sometimes it is difficult and / or expensive for a small company to get a bond.
Talk to the client and see if they are really concerned about liability. If that is the case maybe liability insurance coverage is really what they are looking for.
Another type of bond is to protect against theft (an employee has a position that allows them access to company funds, they might be bonded so that if they embezzle the bonding company will reimburse the company.)
Talk with the client further to find out exactly why they want the bond and what their concerns are. Maybe you can work around it.
If it is an absolute requirement, find out the cost of the bond first and factor that in to your bid. I don't think you will find many customers that require you to be bonded.