Quality product, paired with unparalleled customer satisfaction, can make any business.
One way to keep your customer satisfied is by having their best interests at heart—and surety bonds can help with that.
In order to understand the contribution of security bonds to customer protection, let’s see how surety bonds actually work.
What is a surety bond?
Contrary to the popular belief, it’s not an insurance claim. Bonds are similar to credit lines. The surety provider agrees to repay claims made against the bond in return for better business performance.
The repayment amount doesn’t exceed the bonded (principle) amount. The business has to then repay this amount to the surety company.
In simpler words, surety bonds take three parties under agreement—the surety, the obligee and the principal. The surety promises to pay the obligee on behalf of the principle, in the event they fail to meet obligations outlined in their contract.
How does it protect consumers?
Protection on purchase
Surety bonds secure businesses, which allows consumers to freely partake in business activities. A surety ensures that a business will not indulge in unethical or illegal business activities and prevents businesses from undertaking unprofitable decisions.
For example, if you purchase a brand-new car and later find out that it fails to meet the product specifications outlined by the car dealer, you can make a claim against the dealership surety to get compensation. But this is only possible, if your dealership has a surety bond. In other situations, you may have to take a legal action to receive your compensation.
For your customers, a surety bond makes you a safe bet. They can trust you.
Protection against services
Value for money is the right of every customer. Businesses that cheat consumers out of services lose trust and customers.
Services like schooling, financial advisory, construction workers, etc. enter a contract with their consumer to provide them with a desired end product.
Customers can make a claim against a surety bond, if they fail to receive satisfactory services. Reimbursement to losses is easier, if you’re dealing with a company that has invested in a surety bond.
Since a business is under contract, the surety company ensures that quality product or services are being offered to customers. The surety company may intervene, if it suspects that the business is failing to meet its contractual obligation.
Bonded businesses have better reputation and have easier time finding clients. BondPro is a premier online bond company situated in Oklahoma.
We have been underwriting bonds across 50 states for more than 60 years. If you want to obtain best rates or advice related to contract bonds, probate bonds, car-dealer bonds or mining bonds, get in touch with us.