Small Alberta Business, insurance and bonding?
Answer:
Regarding the bonding aspect of your question. The ‘bonding’ here would be for employee dishonestly and not performance related. An employee dishonesty bond protects your clients from you and your employee should they steal while on your client’s premises. In this case their yard or home. These are referred to as either a janitorial services bond or a business services bond.
There is some protection for an owner with these types of bonds. If your employee does in fact steal from one of your clients and is prosecuted and convicted of the crime, the insurance company will pay the claim (usually this equals the amount stolen and is filed by the victim of the theft). This said if the victim is made whole, there is less chance of you, the owner, needing to make restitution to the victim from your own pocket.
There is no indemnification so you do not have to financially qualify for this type of bond. This means that if the insurance company has to pay a claim against your bond, you do not have to pay them back. On all other types of bonds (license, permit, performance, bid…) you would need to indemnify the insurance carrier and therefore pay them back any claims they paid on your behalf. In these cases you need to financially qualify and the insurance carrier would underwrite your application as such.
The type of bond you would be obtaining is more along the lines of an insurance type policy and not surety. And as you know on car insurance, for example, you are not required to pay back the insurance company if they pay to have a dent fixed.
The bond premium is directly related to the amount of coverage and the number of employees covered. These are relatively cheap in cost.
Contact your current insurance agent or look in the yellow pages under either ‘bonds’ or ‘surety bonds’ for a local agent.
The liability insurance would again protect your clients. However in this case it would be against any damage you cause them on their property.
Have you been told by a governmental agency, or is this just "through the grapevine" advice?
MOST yard and homecleaning businesses I know of are NOT bonded. MANY do not have any insurance at all.
Here's the answers: insurance companies issue bonds. You would need general liability insurance. The best, for a new business, is anyone who will take you - you'll need to contact an agent (probably a few) and get some quotes. Bonding doesn't protect you AT ALL, it protects your client. It's a guarantee, from the insurance company that you will perform (or in some cases, will not steal) a specific duty, for a specific client. If you're doing yard cleaning for the government, they'll want a bond. If you're doing it for private parties, they won't care.
Sometimes you can add employee dishonesty coverage to your business policy, that would cover if your employees stole from the clients.
The general liability protects you, if you should do something while on premises, that leads a third party to get injured, and they sue you. Like, if you leave a rake laying out, they don't see it & step on it, and they break their nose. Or, heaven forbid, a baby crawls into your unsupervised cleaning bucket & drowns.
These cost A LOT for a small, startup business. You'll be lucky to get the GL policy for $500 USD, more likely $750 USD. And the bond, whatever the limit is, you'll have to have those assets to personally guarantee the bond - ie, if your employee steals, you'll be paying the insurance company back.
speak to some reputable brokers.
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