Category Archives: Bonds FYI

Workplace Crime costs $50 Billion a year, protect your business with Fidelity Bonds.

There is a hidden risk facing small businesses across the country that often goes unnoticed until it suddenly rips through a firm’s finances: employee theft. It’s a crime that is costing U.S. businesses $50 billion annually, with 7% of annual revenues lost to theft or fraud according to Statistic Brain.

Studies found that U.S. businesses affected by employee theft lost an average of $1.13 million in 2016. Small and midsize businesses were hit disproportionately, representing 68 percent of the cases. Their median loss in 2016 was $289,864.

Despite the alarming levels of embezzlement taking place, it isn’t top of mind for many small-business owners.

When one hears the word “Bonds” it brings to mind an investment. But there are other types of bonds that have nothing to do with investing; they relate to business operations and function similarly to insurance.

Surety Bonds are like insurance. They back up a promise to do something; if the promise is breached, the bond pays off to complete the promise.

One common Surety Bond type is a Fidelity Bond (or Crime Bond). Fidelity bonds provide insurance against loss from employee misconduct, such as theft or embezzlement, which is not otherwise covered by a company’s regular insurance coverage. A bond can provide blanket coverage for the actions of all employees or can be tailored to cover one or more specific employees.

When safeguards like thorough employee screening and careful supervision aren’t enough, fidelity bond coverage to protect against employee theft is recommended. If one or more of your employees are entrusted to handle cash or other valuable assets, a Fidelity Bond can protect your business.

Coverage can include:

  • Employee theft – Stealing merchandise.
  • Forgery or Alteration – Checks, gift cards etc.
  • Theft of Money and Securities –  Registers etc.
  • Robbery of safe, burglary of other property, stones, bullion, etc.
  • Computer fraud, funds transfer, diverting funds to personal accounts.
  • Money orders and counterfeit money.
  • Theft from third parties, on loan, deliveries, on customer’s premises.

 

The cost of Fidelity Bonds: There is no fixed rate for bonds. There are many factors that impact cost, such as the extent of coverage, whether there is a deductible (if allowed), and the surety company that issues the bond. As a rule of thumb, a fidelity bond can cost about ½% to 1% of the coverage obtained.

Surety and fidelity bonds are a risk management tool, it is helpful to discuss your business requirements with an experienced, trusted agent like BFBond/Bernard Fleischer & Sons Inc. We can advise you what coverage is best for your business when traditional insurance doesn’t provide the protection you want or require.

Becoming a NYC Process Server

How to Become a NYC Process Server.

A process server is a person that delivers important legal documents to individuals for lawyers or other legal services. It is the job of the process server to deliver the documents while adhering to the laws of the state. If you are interested in becoming a New York process server, there are no educational or training requirements but know that in New York City, there is a surety bond licensing requirement to be met.

Step #1 Apply for License

Apply for your license in New York City if you anticipate serving five or more processes in a year to Manhattan, Brooklyn, the Bronx, Staten Island, and Queens. Apply online or, if you prefer, download and complete the Basic Individual License Application from the NYC Department of Consumer Affairs (DCA).

Step #2 Provide a background check

Step #3 Turn in passport sized photo

  • If you submit your application in-person: applicants can be photographed at the DCA Licensing Center at no cost.
  • If you submit online: applicants can upload an image file of a digital passport photo.

Step #4 Obtain your required Process Server Surety Bond.

This is a Bond that must be maintained per your license. A process server bond is a type of surety bond that protects the courts and the clients you serve.

In New York a Process Server Bond needs to be in the amount of $10,000 for individuals or $100,000 for agencies. The amount you pay for your bond (called the bond premium) is largely dependent on your credit score. Generally, applicants with good credit can secure their bond at a rate of 1-4%. Applicants with not-so-great credit could have to pay up to 15% of the total bond amount.

Step #5 Complete paperwork.

Depending on if you are an agency or an individual, you will have different paperwork.

For a more detailed checklist of all the required paperwork, see the New York City Consumer Affairs website.

Step #6 Pay Licensing fees (A 2.49% convenience fee is added if you submit your application and paperwork online)

Step #7 Submit license application

In person: File in person at DCA Licensing Center 42 Broadway, New York, NY 10004

Online: Click “Apply Online” at New York City Consumer Affairs website.

Keep in mind that your application will be denied if you fail to submit all required documents and If you choose not to obtain a license you will be unable to serve more than 5 processes in New York City which will limit your earning potential.

 

The NYC Department of Consumer Affairs  recommends bfgBFBond.com/Bernard Fleischer & Sons Inc. (Formerly Advanced Insurance Services) as a Surety Bonding agency for your consideration, apply online at BFBond.com/process.html or visit our office. We are conveniently located at 29 Broadway, Suite 1511 New York, NY 10006 directly across the street from the Department of Consumer Affairs’ office.

For more information, visit us at BFBond.com, live chat with us or call 800.921.1881

On Time, on Budget, Maximum Profits every time. Payment and Performance Bonds.

To a contractor, calculated risk can be fortune’s accomplice. Failure to recognize, calculate and properly manage the risk inherent in any construction project can, however, lead to financial disaster for any one or all of the participants in a construction project.

Common strategies for allocating project risks include the use of contractual indemnification provisions, requirements for builder’s risk and commercial general liability insurance policies, and requirements for performance bonds and payment bonds.

A payment bond is required on many construction projects. In the construction industry, the payment bond is usually issued along with the performance bond. The payment bond forms a three-way contract between the Owner, the contractor and the surety, to make sure that all sub-contractors, laborers, and material suppliers will be paid leaving the project lien free. A Payment Only Bond is rarely requested.

Payment Bond Terms

The Surety is the company licensed by the Insurance Department and the regulatory agencies to write bonds within the state of the country on which the work will be executed.

The Contractor, also called the principal, promise in the payment bond that the contract will be executed according to specified terms, while the Surety promises that if the contractor fails on his payments, it will pay damages to all demanding parties.

BFbond.com has an easy application that can be filled out online, which will give the necessary information for the underwriter to know who you are and where you are coming from.

THAT’S IT! Easy as 1, 2, 3, our streamlined process will get you on the fast track to obtaining a Payment bond.

For more information about Payment Bonds visit us at www.bfbond.com or call us at 1.800.921.1008

Glossary of Key Bond Terms

Bid Bond:

A type of contract surety bond that
ensures a bidder for a supply or construction
contract will enter into the contract within the
stipulated timeframe if the company wins the bid.
Default results in the obligee (a government
agency, in this case) receiving the difference
between the amount of the principal’s bid and
the bid of the next low bidder or company
who qualifies for the contract, or the amount
of the bond.

Commercial Surety:

A type of surety bond that
can be required by state and local regulators in
a wide variety of situations to protect consumers
and taxpayers. Some of the most significant for
government policymakers include: license and
permit bonds, reclamation bonds, mortgage
broker bonds and subdivision bonds.

Contract Surety:

Surety bonds that involve
construction projects. In the event a contractor
defaults, contract surety bonds ensure funds
are available to complete the contract and pay
subcontractors, suppliers and laborers.

Fidelity Bond:

A bond a business seeks to
protect itself in the event of a loss incurred
because of employee dishonesty or misconduct.
Some states require these bonds for businesses,
such as title insurance companies and credit
unions, that do business with consumers.

License and Permit Bonds:

Statutes and
regulations require these bonds if a company
seeks to obtain a license or permit in a state
or local jurisdiction. If a principal violates its
obligations, this bond pays the obligee or
other third party.

Miller Act:

Law passed in 1935 that requires
performance and payment bonds for federal
construction projects over a designated
amount, currently for contracts over $150,000.

Money Transmitter Bond:

A surety bond that
guarantees money transmission companies
offer services in compliance with state or local
statutes and regulations.

Mortgage Bond:

A type of commercial surety
required by a state or local regulatory agency
for mortgage brokers to become licensed in
that state.

Obligee:

The entity that requires the bond
and is protected if there is a loss or default.

Payment Bond:

A bond given by a contractor
to guarantee payment to subcontractors,
laborers and suppliers for work performed
under the contract.

Performance Bond:

A bond that guarantees
performance of the terms of a written contract.

Premium:

Required by a surety company
from the principal for the issuance of a bond.
Performance and payment bonds come with
a one-time premium that typically equals up
to 2 percent of the contract price.

Principal:

Also called “obligor.” This is the
party who seeks the bond and is bound by the
underlying obligation.
Reclamation Bond: Required by a state
regulatory agency, such as the Department
of Environmental Quality, for a business that
seeks to mine or perform related activities on
public lands. These bonds provide a financial
guarantee that the public lands mined will
be restored.

Subcontractor Bond:

A bond that a general
contractor may require of a subcontractor,
which guarantees the subcontractor will
perform work in accordance with the terms of
the contract and will pay for certain labor and
materials under the contract.

Subdivision Bond:

Developers must get this
bond from a surety if they plan to develop a
plot in a municipality to sell lots or homes.
Local development authorities require
these bonds, which guarantee a developer’s
obligation that the project will adhere to state
and local statutes and regulations, before they
issue a development permit.

Surety:

Third party that issues the bond to the
principal and is responsible for fulfilling the
claim in the event of a default or loss.

Surety Bonds:

A written agreement where a
surety obligates itself to a second party, called
the obligee, to answer for the default of the
principal. In the case of public works contracts,
the obligee would be the state agency and the
principal would be the contractor.

Motor Vehicle Dealer Bonds F.A.Q.

dealer-bond-image

 

Q. What Is a Motor Vehicle Dealer Bond?
A. It is a guarantee that motor vehicle dealers will follow the regulations of their state, and is usually required to obtain a dealer license.

Q. How much does a motor vehicle dealer bond cost?
A. The cost is a percentage of the bond amount. You can call us at 800.921.1008 for a free estimate. If you require an exact price, please complete a motor vehicle dealer bond application and receive the free bond quote.

Q. Can I get a motor vehicle dealer bond with bad credit?
Yes. We have great high risk markets and can get you approved for a new & used motor vehicle dealer bond regardless of bad credit. To learn more, visit our bad credit bond general information page and complete the EZ application.

Q. How to Get a Bad Credit Motor Vehicle Dealer Surety Bond.
A. We have access to many exclusive programs, allowing those with bad credit to get approved. However, the price will be considerably higher compared to standard markets.

Q. How long does the application take?
A. We approve motor vehicle dealer bonds instantly online. The application process takes just minutes. You can get a no obligation online quote on our website at any time.

Q. My friend is an auto dealer. Will my motor vehicle dealer bond cost the same as theirs?
A. Possibly, but the rates vary based on the estimated risk and the ability to repay claims. As a result, your pricing could be lower or higher depending on your risk compared to the other dealer.

Q. How does a motor vehicle dealer bond protect my dealership?
A. It doesn’t. Motor vehicle dealer bonds protect the public from auto dealer fraud. A claim on your bond must be paid back by the dealer to the bonding company. You need to obtain insurance to protect your dealership.
Q. Do I need a motor vehicle dealer bond for selling mobile homes?
A. Very likely, many states require you to obtain motor vehicle dealer bonds to sell various types of mobile homes, including RV’s, manufactured homes and modular homes. However, every state has its own requirements.

Q. Do I need new AND used motor vehicle dealer bonds for selling new & used vehicles?
A. Usually no, one motor vehicle dealer surety bond generally covers both new and used vehicle dealers. However, motor vehicle dealer bond requirements vary by state.

Q. How is a motor vehicle dealer bond different from car dealer insurance?
A. Bonds are a form of credit to motor vehicle dealers and assurance for the public. They guarantee that a dealer will not break the state laws. Should they break laws and cause a claim on the bond, the motor vehicle dealer is responsible for any damages. Motor vehicle dealer insurance protects the dealer from loss, not the public.

Q. How much does a Motor Vehicle Dealer bond cost?
A. Costs vary by bond size, applicant, bond form, state and the bond agency chosen. BF Bond only reviews the personal credit of the business owners. Nearly all other bond agencies will review business and personal financials, experience, bank balances and years in operation, in addition to personal credit. Visit our website and get an estimate, or apply to get approved instantly online.

Get the Motor Vehicle Dealer Bond You Require.
A motor vehicle dealer bond allows you to sell vehicles to the public and other dealers/wholesalers. A wholesale dealer bond only allows you to sell vehicles to other dealers and wholesalers.
A motor vehicle dealer bond applies to retail and wholesale dealers, and only one bond is needed to sell new and used vehicles. Whichever type you need, you can conveniently apply online for all motor vehicle dealer bonds.

For more information contact Jose Ward at 800-925-1008, email JW@bfbond.com or visit us at www.BFBond.com

Public and Independent Adjuster Bonds

Successful business leader with touchpad looking at camera
Successful business leader with touchpad looking at camera

New York adjuster bonds are required by law for insurance claim adjusters that operate as either public adjusters or independent adjusters. Due to the nature of the two positions, independent and public adjusters are often placed in adversarial positions at the negotiating table.  A “public adjuster” acts on behalf of the person insured, in settling claims that take place under insurance contracts issued by the insurer. An “independent adjuster” acts on behalf of an insurer in adjusting claims that take place under insurance contracts issued by the insurer.

Bernard Fleischer & Sons/BF Bond, issues adjuster bonds for applicants with no credit check required and we bond in every state where bonding is required for independent adjusters and public adjusters.  New York adjuster bonds are in the amount of $1,000 for either insurance adjuster classification (public or independent), the bond form is also the same for both and they must also become licensed (if not already licensed and only renewing the bond) through the New York Department of Financial Services (DFS) which is extremely picky about notating the specific license type on the bond form. If the license type isn’t clearly noted, the surety bond may be rejected!

In the required States, any individual or business entity who aids in negotiating the settlement of claims for loss or damage under an insurance policy or who advertises and/or solicits business as an insurance adjuster is required to be licensed as such and obtain a surety bond to be in compliance with the state statutes. The New York adjuster bond guarantees that the adjuster and all sub-licensees named in the adjuster’s license shall, during said term, faithfully perform their duties under the license.

For further information visit us at bfbond.com, call us at 800.921.1008 or fill out an application here.

Renewing your bond? Renew with us, the insurance and bonding agency worth recommending since 1949

businessman with a clock

Many surety bonds are issued on a fixed term but there are some bonds with specific expiration dates set by the obligee, so it is important that you’re aware of when you are required to renew your bond. There are many bonds that expire on December 31st every year so to avoid a lapse in coverage and potential punitive action make sure to check your bond type and its expiration date.

 
It is highly encouraged that all surety bond renewals are done before the current term has ended. That way, there is considerably less chance of any issues that could result in a lapse of coverage. Keep in mind that by waiting until the last minute, if there is a lapse in coverage due to the principal’s failure to renew on time the principal may find themselves without the bond coverage necessary, which may result in penalties.

 
This is especially true for renewals due at the end of the year during the holiday season, when many local government and state offices have more limited hours of operation. We offer surety bonds in all 50 States with a quick and convenient application process to avoid delays. For further information on our surety bond products visit us at bfbond.com, call us at 800.921.1008 or get an application here.

Would a crime policy cover this?

Strange way of stealing Gold from the Royal Canadian Mint.

Via the Anus!

goldbullion1717128The case against Leston Lawrence, 35, in an Ottawa courtroom presided over by Justice Peter Doody on a number of smuggling-for-cash charges may seem like a joke, but the risk of employee dishonesty is all too real. Mr. Lawrence is accused of theft, laundering the proceeds of crime, possession of stolen property, breach of trust and he was fired from the Mint. Would a Fidelity Crime Bond cover this?

 
During testimony it was revealed that Mr. Lawrence set off the metal detectors more often than the other employees (Except for the ones with medical implants), requiring manual scans using a metal detecting wand but they never seemed to find anything on him. Investigators say that he used Vaseline and rubber gloves that they found in his work locker to aid in smuggling the cookie sized pucks of gold.

 
Four of the pucks were found in a safe deposit box owned by Lawrence and he had sold 18 of them for approximately $6,800 each from November 2014 to March 2015. Subsequently, an obviously dedicated security employee tested the idea that the pucks could be concealed in an anal cavity and not be detected by the wand.

 
Curiously, the mint never noticed any gold missing. After a bank teller noticed Mr. Lawrence had been cashing several checks from a gold dealer and then transferring the money out of the country is when the teller looked up the man’s place of work and alerted the mint to the suspicious activity.

 
Jaw dropping statistics from the ‘Statistic Brain’ website, trusted research provider for Forbes, CNN, ABC News, and many others reveals that the amount stolen annually from U.S. businesses by employees is $50,000,000,000 and 7% of annual revenues are lost to employee dishonesty and fraud.

 
Although a minority of employees becomes dishonest, they can rationalize their theft in many ways: ‘the company won’t miss it,’ ‘they’re not paying me enough,’ or the person succumbs to gambling or some other addiction. Protecting a business with a Fiduciary bond aka Crime bond or Fidelity bond is the most effective way of preventing these losses. The definition on a Travelers Insurance policy for Employee Theft reads

 

“The Company will pay the Insured for the Insured’s direct loss of, or direct loss from damage to
Money, Securities and Other Property directly caused by Theft or Forgery committed by an
Employee, whether identified or not, acting alone or in collusion with other persons”

 

In addition to the employer being protected from covered losses due to theft and forgery, the exact definition of “who” is covered is defined in the policy, but should include all current or former employees, partners, members, directors, volunteers, trustees, seasonal employees and temporary employees. If the mint had one of these bond policies they would be insured against the conservatively estimated $180,000.00 loss.

 
Some of the typical exclusions to these policies are accounting or math errors, vandalism, Governmental action, restatement of a profit and loss statement and theft by the employer itself. You cannot steal from yourself; however coverage extends to partners, directors, members, and trustees.

 
To learn more about fiduciary bond products or any other types of bonds visit our website at www.bfbond.com, our blog at www.bfbond.com/blog , call us at 800.921.1008, email jward@bfbond.com with your inquiries or download the application here.

 

 

How can small contractors and their customers benefit from Performance Bonds and Surety Bonds?

keep-your-cool-during-a-home-renovationEver watch HGTV (Home & Garden Television) and witness the horror stories left behind by shady contractors? Things like homeowners without kitchens or baths for months. Police recently arrested 45-year-old Cary Grimm on charges of grand theft for doing just that. Customers say the contractor disappeared without completing the work that was he was contracted for.

One couple said their home remodeling project turned into a nightmare after a few weeks’ delay turned into a half a year battle. The complaints which total nearly $90,000 based on over a dozen complaints by customers that came in after Grimm exhibited at a local home show. How could a surety bond aka performance Bond have helped? These bonds ensure a contractor will perform work required in a contract or winning bid.

Bonds provide small contractors and customers with numerous benefits. The surety bond is a form of protection against contractor default due to faulty workmanship, late delivery or not using specified materials. The surety company helps the contractor avoid costly delays and contract disputes if the sub-contract defaults with their portion of the job by non-performance.  Then the surety company will intervene to fulfill the contractor’s scope of work. When a project is bonded, there’s also an added layer of payment protection for workers and suppliers of the contractor.

Surety bonds help level the playing field, and allow a small contractor to compete in the free market, leading to lucrative contracting opportunities. Consumers and businesses feel more secure when hiring a bonded contractor.  A contractor’s bond and insurance are important forms of protection for anyone who is taking on a construction project.

Furthermore; to avoid a Mechanics Lien, a Payment bond is suggested.  Using this Surety Bond as a tool, gives owners assurance that all suppliers and sub-contractors are paid. Also suggested is an Ancillary bond to guarantee that non-material or performance requirements of a contract will be met. An example would be compliance with special terms, laws or regulations.

Call us to discuss your Performance, Bid, Ancillary and Payment bond requirements.

visit www.bfbond.com call 800-921-1008 or email Jward@bfbond.com

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Appeal Bonds: to post a bond or deposit with the courts?

justice-423446_1280In a Civil Case when an appeal bond is required by the judge, the principle has the option of getting a surety bond or depositing cash in the amount of the bond with the court. Does it make sense to obtain a surety bond or does it make sense to deposit money with the court? And if you do deposit with the court, how long before you get your  money back?

Benefits of Posting a bond:

  1. The benefit of posting an appeal bond is that the bonding company has options to take collateral in form of cash or brokerage account or Letter of Credit, in some incidents if your credit is strong enough, no collateral is required,  these options gives you the ability to leverage your money.  Of course if your credit is poor, then the collateral options are limited
  2. If successful in winning the appeal, the funds are returned to you very quick.

Cons of depositing money with the court:

  1. The courts only accept cash.
  2. Takes months before the paperwork is processed.
  3.  Access to capital is lost

Real Scenario:

A client mentioned that he could not meet his financial obligations due to the fact that he had a $400,000 deposit held with the court and they are taking over 6o days to release his funds..

At BF Bond our customer service professionals can address our client’s diverse need which often requires finding creative solutions to these problems. Retrieving deposits from the courts can be a long and arduous process. When faced with a decision like this that may cost you time and money, contact us and we can help make a difficult process much easier.

Complete an application here

Call Jose at 800-921-1008 if you have any questions or to discuss an individual case.

BF Bond, An insurance company worth recommending. since 1949