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If you own a moving company or storage facility, then your clients are going to put a lot of trust in you to safeguard their personal property while you have it in your care. You also probably have an obligation to meet their demands according to the contract you signed with them.  

This contract will define multiple aspects of your agreement with the client, namely how you will pack, transport, unload and handle their possessions. If you fail to honor this contract, then you will likely owe your client some money. However, you can also guarantee them that you will have the money to repay them by reassuring them that you are a bonded company. What does this mean? 

Businesses that are bonded carry appropriately underwritten financial bonds. These bonds essentially act as promises to other parties (clients, the authorities, etc.) that businesses will do their work, or else they will pay up. They are promises that you will be able to repay someone if you can’t meet their requirements. Let’s take a closer look at the types of bonds that moving companies might need. 



How do bonds work? 

Some people mistakenly think that a bond is an insurance policy. It is not. It is simply a guarantee that the bond holder has the financial assets to compensate someone to whom they owe money. 

When you sign a contract with someone else, then you have an obligation to follow the rules outlined in the contract. If you fail in this duty, then you might have not only violated the contract, but also caused someone else a large financial loss. Because the contract required you to do your duty, the involved third party might have grounds to demand repayment from you.  

If that party knows you carry a bond, then they can file against the bond for compensation for their losses. The bond itself is usually issued by a bond company, which underwrites your bond’s guarantee. The bond company will repay the third party. However, they will then expect your business to repay them. Therefore, your company won’t get off scot-free.  

However, it is usually easier to compensate a bond company for their payout rather than having to deal directly with a dissatisfied customer. Overall, by carrying the appropriate bonds for your moving company, you will be able to shore up your commercial reputation and guide your business through challenging financial losses. 

There are many different bonds that might come to the assistance of moving companies. These include: 

  • Surety Bonds: These are some of the most important bonds that a moving business can carry. It promises that if you do your work incorrectly, and your mistakes cause a client a loss, then you will compensate the client. For example, if someone in your company steals some of the client’s possessions during a move, then the client can file against the appropriate surety bond to receive compensation for their losses. 
  • License Bonds: In order to receive an operating license in some states, you must obtain a licensing bond. This bond assures the local authorities that you will follow all regulations that apply to your business’s operations. However, they can also guarantee that you will compensate your customers who sustain harm if you fail to follow local law. 
  • Payment Bonds: Some moving companies hire sub-contractors or use outsourced materials to help them complete certain tasks. A payment bond guarantees that the moving company itself will pay these parties appropriately so that no mistakes on their parts reflect poorly on the customers. 
  • Performance Bonds: When you sign a contract with your clients, the contract will likely make them a few promises on how you will do your work. Therefore, you have to do your work as promised in the contract. If you fail to do so, however, then your client might be able to file against a performance bond. 
  • Bid Bonds: If your moving company must bid for a contract, then you can use a bid bond as proof that you have adequately represented your assets and will perform your duties appropriately if you win the contract. Bid bonds can also act as promises that you will buy other appropriate bonds after you win the job. 


Generally, you should start your bond portfolio with a surety bond. It is often the broadest and most beneficial type of protection for moving companies due to its close connections to the services they offer. After all, if you fail to complete the client’s move successfully, then you will likely have to pick up the tab. However, a surety bond alone is usually not the only type of bond you need. That’s why you should work with your bonding agent to determine how to augment your coverage. 

Keep in mind, bonds are not liability insurance policies. Though the two sound very similar, liability policy claims are often triggered by a customer lawsuit against your company. That does not necessarily have to be the case with a bond claim, however. Most businesses need both types of coverage in order to put a proper risk management plan in place. 

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