Business Services Bond for One Year (TX)

A recent study showed that over 50% of small businesses are sued each year. Such litigation can be expensive, ranging from $3,000 to $150,000. It’s no wonder that some 95% of these companies settle such lawsuits before going to trial. But paying the damages out of pocket can be devastating. One protective measure for businesses is to purchase a bond that will pay for legal claims.

The state of Texas either suggests or requires the carrying of bonds for various types of businesses. One such bond is the Business Service Bond, sometimes referred to as a dishonesty bond. It is a bond or insurance intended for companies that provide services to clients, and its purpose is to safeguard the interests of both the customers and the business owner.

What is a Business Services Bond, and what does it cover? Who is required to purchase a bond, and what does it cost?

What Is a Business Service Bond?

A Business Services Bond is a type of fidelity bond that protects business owners and their clients from fraud, larceny, or theft by an employee. Businesses that provide services work hard to develop a good reputation among their clients, especially if the services are offered in the homes of customers.

A business may make great efforts to verify the trustworthiness of skilled employees, perhaps performing background checks and other investigative processes before hiring. But the reality is that there is always a chance that an employee will defraud a customer or cause damage to personal property, whether intentionally or inadvertently. A Business Services Bond covers the expenses of a company if a client makes a claim against one of its employees.

Consider a few scenarios. A courier “misplaces” cash or valuables intended for a client. A tradesman sells valuable items and claims that an insufficient quantity was purchased or that items went missing. Or a janitor steals personal property while cleaning. All of these scenarios would likely result in some sort of claim by the customer.

If a business did not have a bond in place, it would likely need to pay damages out of pocket, affecting its bottom line. When you add to that the damage to their company’s reputation and the resources needed to hire a replacement and provide training, the effects can be overwhelming. The requirement of purchasing a bond to cover expenses significantly reduces the stress and financial impact felt by the business owner.

An additional benefit of bonded business services is that it gives prospective clients peace of mind knowing that your services are guaranteed. Even in the case of an accident or oversight, a claim can be satisfied in a professional manner.

What Professions Qualify?

Business services refer to skilled services provided by tradesmen or professionals. Some examples of professions providing such services are:

• Cabinet makers
• Carpenters
• Electricians
• HVAC technicians
• Landscapers
• Locksmiths
• Masons and tile or stone setters
• Painters
• Plumbers

Some examples of service providers that can purchase a Business Services Bond are:

• Appliance repair services
• Brokerages
• Couriers and cash carriers
• In-home care providers and nursing homes
• Messenger services
• Pest control services
• Pool maintenance and cleaning
• Other businesses that provide in-home services

Business Services Bonds are not mandatory, but the benefits to business owners are many, and purchasing the bond is a cost-effective way to provide guarantees.

What Is Covered

The purpose of this bond is to cover dishonesty, theft, and fraud by employees and give a measure of credibility to a service provider, in effect guaranteeing the service. Coverage ranges greatly, with some providers offering bonds of $10,000 and up while others start with bonds as low as $2,500. Talk to your surety provider to see what coverage works best for your business type and the number of employees providing services.

What Is Not Covered

A Business Service Bond does not replace a contractor bond or a payment and performance bond. Additionally, most Business Services Bonds contain a conviction clause, meaning that a claim is only paid out if the accused party is convicted. This clause protects your business from fraudulent or frivolous claims.

How Much Does It Cost?

Business Services Bonds can be purchased for employees individually or as a group. While details vary by bond and provider, bonds generally start at about $100. The final cost, however, can depend on various factors, such as coverage limit, deductible, number of employees covered, and the type of services provided. It only takes a few minutes to get a quote online and see that for a minimal annual fee, you can get coverage that will instill confidence in your clients and result in personal peace of mind.

How to Purchase a Business Services Bond

Unlike many other bonds, the Business Service Bond is not mandatory for businesses in Texas. But since it can serve as a symbol of professionalism and fidelity, it is a cost-effective way to give business owners and their clients peace of mind. To purchase a Business Services Bond:

• Select a bond provider. Shop around for a bond provider authorized to issue bonds in the state of Texas. TMD Surety Bonds is an example of a leading Business Services Bond provider based in Dallas/Fort Worth.
• Request a quote. Most expert bond providers have the option of requesting a quote online. Since there are various bonds available, you will need to provide details such as the bond amount and number of employees.
• Purchase a bond. Once you decide on a provider, go ahead and purchase the bond. Often, the signed and sealed bond can be issued right away.
• Advertise bonded services. You can adjust your advertising to reflect the fact that your business’s services are bonded. This can give clients additional peace of mind and create trust. Such confidence may be a game-changer for clients allowing strangers into their homes.

Getting Started With Your Business Services Bond

TMD Surety Bonds is one of the leading bond providers in Texas, with professional agents standing by to help you get started on your application. Submit a request and pay online to get your bond processed immediately.