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Discussion in 'Business Operations' started by jayandlo, Apr 26, 2002.

  1. jayandlo

    jayandlo LawnSite Member
    from Georgia
    Posts: 35

    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.
  2. prairie

    prairie LawnSite Member
    from kansas
    Posts: 115

    Never thought of that one before. My biz is a LLP, Limited Liability Partnership. Someday maybe INC.. If you need to set set up you should contact you local Sec. Of State office and it wont cost but $100 to do so.
  3. bruces

    bruces LawnSite Senior Member
    Posts: 648

    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.
  4. John Allin

    John Allin LawnSite Bronze Member
    Posts: 1,489

    The bond market has tightened up considerably in the past 6 months.... Talk to your insurance agent about this. It's their forte'.
  5. Lanelle

    Lanelle LawnSite Bronze Member
    Posts: 1,361

    What has caused this tightening of the bond market? (If the answer is 9-11 I think I'll scream.)
  6. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Very accurate reply, bruces.

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