I’ve been reading about the different types of insurance for a small business. I’m confused between surety bonds and e&o/general liability.
Both mention they can be used for contractors (business services, not construction.)
What is the difference between the two? I’ve already googled it of course, but still don’t understand the difference and when you would use or want one over the other.
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I work in transportation. If I take a truckload of your product from point A to point B and you don’t pay me, your surety bond is there and I can file against it to get paid.
In my industry at least, the problem with a surety bond is that often times by the time anyone knows there is a problem, there are problems everywhere and there is not enough money in the bond to pay everyone.
Recently the minimum was brought to $75,000, but just a few years ago the minimum was just $10,000. That $10,000 could have been just three to five invoices. By the time anyone figured out the company was going under there could have been thousands of invoices and we all would have collected pennies.
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