Business Service Bonds

Business service bonds are a type of bond purchased by businesses that perform service and work on their customer’s property. The bond offers financial protection against potential theft or fraud carried out by dishonest employees of the business. The bond is not required by law, but can is usually purchased to establish a business’s credibility and give their customers a peace of mind. A business service bond is a strong differentiator for any business whose employees enter customer’s buildings to perform services. Having a business service bond in place can be the difference between winning the contract for a job or losing out on potential lucrative opportunities, as many commercial clients have it as a hard requirement.

Sample Payment and Performance Bond Form
Business Service Bond

Bond Amount: Varies based on coverage required

green checkmark
Acceptance Guaranteed
green checkmark
Refund within 5 days if not satisfactory
1 Year Bond Starts at
1 Year Bond Price
of bond amount, based on credit check
based on your credit history
Get QuotePurchase

How much does it cost?

The pricing for business service bonds depends on the number of employees and the bond amount needed by each business. You should choose a bond amount that is appropriate for the type of client you service. Generally speaking, the more valuable the items your clients have on premise, the higher the bond amount should be. The bond amount is the maximum amount that could be paid out to clients in the event of theft. For example, a concert venue would likely require a greater bond amount than that of an individual’s home. Price estimates are shown in the chart below (desktop only). You can purchase a business service bond directly on SuretyNow with no credit check. This is true for bonds up to $100,000. Right after you make payment on our website, your bond will be made available to you via email.

Get Quote
purple moneyDecorative Purple Dollar Sign

Business Service Bonds Common FAQs

Are business service bonds required?

Business service bonds are not required by law for any type of business. Nor are they required by any official state or local industry licensing boards. However, they may be required by a hiring party. For example, an auto dealer business that is looking to hire a window cleaning company for their showroom may require the company that they hire to have a business service bond in place. Or they may ask the window cleaning company to agree to purchase a bond before carrying out the job. 

What types of business are business service bonds suited for? 

A business service bond is suited for your business if your customers ask you to do work on their property. In our experiences, here are some of the more common business types that purchase business service bonds:

  • Janitorial services (most common) 
  • Appliance repair or installation services
  • Pool cleaning and repair services
  • Movers
  • Painters
  • Landscaping and groundskeeping services
  • Nanny and maid services
  • Security guard services
  • Food caterers 
  • Pet sitters
  • Concierge services
  • Locksmiths
  • Home healthcare providers
  • IT consulting firms (if they go on-site)

Business service bond vs. employee theft bond? 

Both business service bonds and employee theft bonds are insurance policies that protect businesses against financial losses caused by dishonesty or criminal acts of their employees. However, there are some notable differences between the two:

Coverage: Business service bonds typically cover losses related to the theft of money or property by an employee while performing their duties off-site, such as at a customer's home or business. In contrast, employee theft bonds generally cover losses caused by dishonest acts committed by employees while on the employer's premises

Purpose: Business service bonds are purchased by businesses to provide reassurance to their customers that they will be protected financially against employee theft. Employee theft bonds, on the other hand, are typically purchased by businesses to protect themselves from losses caused by employee dishonesty

Beneficiary: For business service bonds, the claims are made by and paid out to the clients of the business that purchased the bond. For employee theft bonds, the claims are made by and paid out directly to the business

Cost: Business service bonds are generally less expensive than employee theft bonds, as the coverage is more limited in scope

Claims process: The claims process for business service bonds is often more straightforward than for employee theft bonds, as there is typically less investigation required to determine if a loss is covered by the bond

Get a quote

Business service bond vs. liability insurance? 

A business service bond provides financial protection for a business's clients in case of theft or accidents that occur on the customer’s premise. In contrast, liability insurance protects the business from financial loss if it is sued for harm caused to a person or their property. This type of insurance covers legal defense costs and any damages awarded in a lawsuit, shielding the business from various claims like slip-and-fall accidents, property damage, and injuries caused by their products or services.

In essence, the primary distinction lies in the parties covered: a business service bond protects the customers of the business, while liability insurance shields the business itself from financial loss due to lawsuits and liability.

Business service bond vs. janitorial service bond? 

A janitorial service bond is a specialized type of business service bond designed specifically to provide theft coverage to the customers of cleaning and janitorial service providers. On the other hand, a business service bond provides the same coverage for a wider set of businesses that perform services on customer properties. Generally speaking, janitorial service bonds are slightly less expensive due to the narrower scope of coverage. 

How are business service bond claims handled? 

The process for handling business service bond claims varies depending on the terms of the bond and the specific circumstances of the claim. In general, here are the 4 steps towards handling a business service bond claim: 

Filing a Claim: The client who has suffered a loss due to the company's failure to perform its contractual obligations must file a claim against the business service bond. This involves submitting a claim form along with any relevant documentation to the bonding company.

Reviewing the Claim: Once the claim has been submitted, the bonding company will review the claim to determine whether it is covered under the terms of the bond. This may involve investigating the circumstances surrounding the claim and reviewing the client's contract with the company.

Paying the Claim: If the bonding company determines that the claim is covered under the terms of the bond, it will pay the client for their losses up to the amount specified in the bond. The company may also be required to reimburse the bonding company for any payments made to the client.

Resolving Disputes: If there is a dispute over the validity or amount of the claim, the bonding company and the client may need to negotiate or seek mediation or arbitration to reach a resolution.

One important note about business service bonds is that they typically come with a “conviction clause”, which stipulates that a surety company will only pay out proceeds for a claim made by a customer if the accused employee or employees have been formally convicted in a court of law. This is a very useful feature for purchasers of the bond as it limits fraudulent claims against the bond. You can purchase a business service bond knowing that claims are only paid out with proper evidence of the crime. 

Get a quote