Contractors and other types of small businesses that require entry into a home or business to complete work may want to consider getting bonded. Bonds are sometimes referred to as surety bonds. A bond guarantees that a customer will be paid if the business does not fulfill its contract. Many small business owners who purchase bonds do so for protection in the event that one of their employees steals from the home or business of a customer. In the event that this does occur the owner of a bonded business will only be covered if the employee who has been charged with theft is convicted.

There are five types of bonds available to small businesses. They are:

o Performance – Work will be performed based on the terms of the contract.

o Bid – If you win the bid, you will do the work.

o Indemnity- Covers loss if you fail to do the work or if you fail to pay other vendors based on the terms of the contract.

o License- Licenses are required by some states for certain types of businesses. You may obtain the license directly from the state.

o Payment- States that you will be responsible for paying the subcontractor and material suppliers.

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