Insurance

An Overview About Commercial Surety Bonds

http://bullfroginsurance.com/bonding/ is a guarantee of adherence to a certain law, obligation or court order. Each bond comes with its own unique circumstances, requiring its participants to protect each other from financial harm. The participants of commercial surety bonds include;

  • Principal– Is the person who purchases the bond as an assurance of future work performance.
  • Surety– This is the person financially guaranteeing the principal to act in accordance with the terms spelt out in the bond.
  • Obligee– A person who requires the bond and is entitled to minimize the likelihood of a financial loss.

It is a requirement by the law that the obligee recovers loses made by the principal, he or she fails to fulfill or act in accordance with the terms of the contract. However, in the recovery process, the obligee is only required to recover an amount not exceeding the cost of the bond.

There are certain professional bodies that require their members to be competent enough in order to gain public confidence. This requires them to obtain practices in order to transact any business on behalf of the body. When a firm is bonded, it means that some of its money is controlled by the state and clients can be indemnified in case they make claims against the business.

Types of Commercial Surety Bonds

  • License and Permits– This is a requirement by the federal or county state as a prerequisite in order to operate a certain business. It shows a commitment by the obligee that the business will comply or act within the underlying statutes of the federal or county laws and regulations. Examples of bonds under this include customs bonds, environmental protection bonds among many others.
  • Court Bonds– These are bonds that are prescribed by the courts of law. They can be either judicial or fiduciary bonds. Judiciary bonds are as a result of a court litigation as remedy for any legal action that could have been taken by the court. Judicial bonds include injunction and appeal bonds. Fiduciary bonds bind someone’s property under the care of another individual who assures the court of performing specified tasks in relation to the property, faithfully. Examples include trustee and administrator bonds.
  • Public Official Bonds– These are bonds seeking to guarantee the confidence of elected persons to public offices that they will faithfully execute their duties as required. They include notaries public bonds, credit union volunteers bonds, judges and magistrates bonds among others.
  • Miscellaneous Bonds– These are bonds that support private or unique business relationships between different individuals. They include lost securities bonds, self-insured guaranty bonds and union bonds.

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How Important is Insurance?

There are people who know the true value of insurance, there are people who have an idea of importance of insurance, and there are people who simply think of insurance as an unnecessary expense.  The truth is that the importance of insurance is an undeniable matter, especially for people who have had the opportunity to make claims for what they have insured.  For those who are simply unaware of insurance importance, they should keep in mind that insurance can protect them from any costly expense on loss or damages that fall under the coverage of what they have insured.

If you are properly insured, you do not have to worry about loss or damage on the item you have insured as this will get taken care of by the insurance company, provided of course that the loss or damage is within the boundaries of your insurance coverage.  Nevertheless, having insurance on something that you value or treasure can give you peace of mind.  If you have peace of mind, you can rest easy knowing that you have the backing of your insurance company.

The peace of mind you get is none truer than when you are a professional who practices and provide services for your professional trade.  As well all know, these are very litigious times and you can get sued by the simplest dissatisfaction of a client.  Professionals know this very well and such lawsuits can put damage on the reputation they have built through their many years of service; not to mention the costly expense they need to spend on the lawsuit part.  Lawsuits can truly be damaging to professionals.  However, if they have professional liability insurance, they are able to breathe easy and perform their duties even better as they can work without having to think about getting sued.

The truth is that you will never know the important of insurance until you really need it.  This is why in order to protect yourself from any unwanted costly expenses, especially on something that is important to you, it is in your best interest to have it insured.  You surely would not want to get caught with damage or loss on the item you value without any insurance.  After all, insurance is a means of protecting your best interest.…

Principles of Insurance

Insurance companies take risks whenever they issue an insurance policy to someone.  This is because they have to trust the disclosure the client says on what is being insured.  Since they are not able to fully examine what is being insured to them, they are left with no choice but to trust what the client says to them.  This leaves insurance companies vulnerable to scheming individuals or group of people who attempt to screw them for money.  As a means of protection, they have built six Principles of Insurance to abide by so they do not get screwed by people who plan to underhand their business.

Six Principles of Insurance:

Principle of Utmost Good Faith – it has come to an understanding that the client discloses everything that needs to be disclosed over the item that they are insuring.  Proper disclosure allows for proper evaluation of the item being insured.  Failure to reveal important matters on the item being insured will render the policy void and claims made on such will be denied.

Principle of Insurance Interest – it is believed that the item being insured is valuable to the client, otherwise, the insurance company will not insure something that the client does not hold great value to.  Insurance companies’ takes great risk in insuring something the client does not really find valuable or important to them.  Insuring something that is not important means you intend to commit fraud.

Principle of Indemnity – claims given to clients will not exceed the amount of cost needed to repair or replace the item insured.  Once claims have been provided by the insurer, the insurer indemnifies that the insured item will be in its pre-damaged condition.

Principle of Proximate Cause – due to the different coverage available for different types of insurance, any damage or loss that is not within the boundaries or inclusions of the insurance coverage will be denied of claims.

Principle of Subrogation – damage caused by a third party will be at the cost of the insurer.  However, the insurer reserves the right to sue the third party for damages made unto the insurer.  Normally, the settlement insurers require are more than double the claims provided to their policyholders.

Principle of Contribution – even though you can have the same insurance policy from two different insurance company does not mean you can receive claims from both of them.  A policyholder is only allowed one claim which both insurers will contribute to fulfill the claim.…