Warehouse Bond

DEFINITION of 'Warehouse Bond '

A type of financial protection that assures an individual or business keeping goods in a storage facility that any losses will be covered if the facility fails to meet the terms of its contract. If the warehouse owner or operator fails to meet its obligations, a third party company called a surety will act as an intermediary and compensate the client for his or her loss.

BREAKING DOWN 'Warehouse Bond '

State governments often require warehousers to be bonded. They also establish financial requirements for bonding. For example, the state of Massachusetts requires all public warehousemen to be licensed and bonded, and the bond requirement is $10,000 per warehouse. Bond requirements can vary depending on the type of warehouse (e.g., grain warehouse, eviction warehouse, public warehouse).

RELATED TERMS
  1. Warehouse Financing

    A form of inventory financing in which loans are made to manufacturers ...
  2. Warehouse Lending

    A line of credit extended by a financial institution to a loan ...
  3. Operating Activities

    A company's typical daily processes that generate income. Operating ...
  4. Construction Bond

    A type of surety bond used by investors in construction projects ...
  5. Industrial Park

    A portion of a city that is zoned for industrial use (as opposed ...
  6. Maintenance Bond

    A type of surety bond purchased by a contractor that protects ...
Related Articles
  1. Markets

    How Much Does a Costco Store Sell Each Year?

    When I walk into a business, I often try to guess how much it generates in sales each year. One of my favorite places to do so is Costco (NASDAQ: COST), which offers a peerless volume of products ...
  2. Investing

    How Do Internal Controls Work?

    Essentially, internal controls limit fraud and other illegal activities.
  3. Managing Wealth

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
  4. Markets

    How To Invest In Corporate Bonds

    Understand the basics of corporate bonds to increase your chances of positive returns.
  5. Investing

    How Does a Credit Facility Work?

    A credit facility is a loan or collection of loans a business or corporation takes to generate capital over an extended period of time.
  6. Personal Finance

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  7. Retirement

    Should I Invest in Bonds After I Retire?

    Yes, retirees should invest in bonds, but remember that not all bonds are safe investments. Seek the help of a financial advisor.
  8. Personal Finance

    Municipal Bond Tips For The Series 7 Exam

    Learn to distinguish between general obligation and revenue bonds to ace this test.
  9. ETFs & Mutual Funds

    Key Strategies To Avoid Negative Bond Returns

    It is difficult to make money in bonds in a rising rate environment, but there are ways to avoid losses.
  10. Managing Wealth

    5 Basic Things To Know About Bonds

    Learn these basic terms to breakdown this seemingly complex investment area.
RELATED FAQS
  1. How can a company control its holding costs?

    Learn about the specific costs that go into a company's overall inventory holding costs, and understand how a company can ... Read Answer >>
  2. What is the risk of holding a bond trading at a discount until maturity?

    Let’s say a corporate bond who was quoting 95 is now quoting 70 because of increased fear regarding the company. The ... Read Answer >>
  3. Where can I buy government bonds?

    The type of bond determines where you can purchase it, so you need to decide which type of bond you would like to purchase ... Read Answer >>
  4. What do cities do with the funds generated from municipal bonds?

    Learn more about municipal bonds, including the various types of bonds issued and the purposes of municipal bond funds, such ... Read Answer >>
  5. How do the returns on municipal bonds compare to those of other bonds?

    Learn how tax-free municipal bonds may provide better returns than other types of bonds, and understand the risks of municipal ... Read Answer >>
  6. Which factors most influence fixed income securities?

    Learn about the main factors that impact the price of fixed income securities, and understand the various types of risk associated ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center