Bonding and insurance are necessary in businesses that deal with potential acts of the company or its employees that risk the public’s trust or may cause some form of damage. To be bonded, the company must be able to prove that it has enough assets to complete jobs it has been hired to do. Bonding is needed in many construction businesses.

Individuals may need to be bonded, too, if they handle large sums of money. The single owner will need insurance for his or her premises and to protect his or her employees who handle large sums of money against possible loss or theft. The reason for these regulations is to fix the responsibilities of the firm and to protect the public from unsafe and unsavory businesses or illegal business practices. LO.1