INSURANCE
Protect the Strength of Your Business

Protect Your Business Interests with Surety and Fidelity Bonds from State Farm®

Let State Farm Help With Your Bonding Needs

A fidelity bond or surety bond can help protect the interests of your growing business. At State Farm, we combine the financial strength of our full service commercial Surety and Fidelity Bond Department along with more than 17,000 local agents to provide you or your business professional with superior service.

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Surety Bond

Why do I need a surety bond for my business?

  • As a business owner, you may need a surety bond to guarantee payment for state sales taxes or utility bills.
  • Or as a contractor, you may need to post a license or permit bond to guarantee your work for licensing requirements with municipalities.
  • Attorneys may have clients that are required to post court bonds such as administrators or executors bonds to guarantee their performance while distributing assets in estate situations.
  • Notary publics are required to post bonds in most states.

Types of Surety Bonds

License and Permit Bond

License bonds guarantee the Principal will comply with applicable codes and regulations established by the Obligee (The Obligee is usually a government entity such as a City, Town, or State). Permit bonds grant a Privilege.

Types include:

  • Electrician's license
  • Plumber's license
  • General Contractor's license
  • Driveway permit
  • Sign permit
  • Sales tax

Example: Electrical contractors may be required to post a bond as part of their licensing requirements. The obligation of the bond may specify that the contractor will follow the electrical codes established in that city, town, or municipality.

The requirements of the bond and ordinance must be understood before the bond is written. The agent may ask you to obtain a copy of the ordinance or law that specifies the requirements and a copy of the bond, if the Obligee has its own.

Depending upon the type of obligation, supporting documentation such as signatures, financial statements, and other supplemental information may be required.

Fidelity Bond Policies — Blanket/Schedule

Types of Fidelity Bonds

Blanket Fidelity Bond

  • Covers ALL EMPLOYEES of the named insured unless specifically excluded
  • New employees are automatically covered
  • All employees are bonded for the same aggregate amount
  • Limit of liability applies "per occurrence" as defined in the policy
  • Premiums are based on the amount of coverage requested, the total number of ALL employees, the business activities of the insured, and the amount of the deductible. Common uses for a blanket bond would be:
    • Businesses with large numbers of employees
    • Businesses with frequent employee turnover??
    • Organizations with voluntary or honorary positions (not for profit associations)

Disclosure

This is only a general description of coverages of the available types of insurance and is not a statement of contract. Details of coverage, limits or services may not be available for all businesses and vary in some states. All coverages are subject to the terms, provisions, exclusions and conditions in the policy itself and in any endorsements.