Pennsylvania startups may be aware that their new business requires insurance, but if they plan to go public, they’ll need bond insurance before offering investments. Bond insurance protects investors in a corporation or government entity that issues bonds, a common fundraising mechanism. At Bartal Insurance, we offer bond insurance to business owners in Scranton, PA, and can help incorporate it into your commercial insurance package.

Understanding the Need for Bond Insurance

Traditionally, corporations and governments have issued bonds to raise funds for projects. Governments often resort to bonds when they need to finance a war effort or major capital improvement project, especially when raising taxes is not viable. Corporations use bonds to fund business expansion or research and development projects.

Recently, startups have turned to crowdfunding platforms like GoFundMe for quick capital. While these methods can fund small projects, a startup looking to expand might incorporate and offer a bond to avoid going public. However, offering bonds requires as much paperwork and compliance as an initial public offering (IPO), including the need for bond insurance, which Bartal Insurance can help you secure.

Issuing a Bond in Pennsylvania

The Pennsylvania legal code outlines the requirements for any business or government agency wishing to offer a bond. Title 67, Section 449.3., covers the state’s advertising, bidding, and bond requirements rules. It also explains the three main types of bond insurance: