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:

Bid bond
Performance bond
Payment bond

This section also details when an organization must purchase any of these types of bond insurance.

Contact Us Today

If you need bond insurance in any of its three forms, let Bartal Insurance help your Scranton, PA business stay compliant. Call or email us today.

Industries That Require Bond Insurance

A diverse array of individuals, companies, and municipalities that need to meet legal requirements buy bond insurance in Pennsylvania. The mining industry tops the list as one of the best-known industries in the state that needs bond insurance. That said, it’s not the only one. Title insurance agents and insurance holding companies need bond insurance too. Whether you work as an independent construction contractor or run a construction company with employees, you will need bond insurance in Pennsylvania. Each industry requires a different amount of bond insurance. For instance, a title insurance agent must buy a minimum of $100,000 bond insurance.

How do you know if you need bond insurance?

To ascertain whether you require bond insurance, consult the Pennsylvania Insurance Department website. As the government entity supervising insurance in the state, it provides the state legal codes pertinent to bond insurance and other types of business insurance. State-level offices of industry registration where professionals must register also provide this information. For instance, when a plumber’s apprentice is ready for their state certification, the office of registration gives them a list of requirements to complete their license application.