Bond insurance, also known as financial guaranty insurance, is unique form of commercial coverage. When a business secures this type of coverage, an insurance company is guaranteeing that principal and scheduled interest payments will be made. This type of coverage offers investors the peace of mind that comes with knowing that their investment will be repaid even if the other party is not able to meet their contractual obligation to make timely payments. Essentially, this type of bond insurance ensures that a company or other entity can repay its investors even if their business or capital venture does not pan out as planned.
In addition to financial guarantee bonds, there are other types of commercial bonds as well. For instance, other common types include surety, welfare & pension plan, license, construction contract, bid, and so on. In some cases, bonds are a mandatory type of insurance. For instance, those involved in the construction/contractor, licensing/permitting, and court industries are required to carry commercial bonds.
Commercial bonds are state-mandated agreements that guarantee that your business is adhering to the guidelines and regulations that govern your specific industry. While bonds are mandatory, it’s important to understand that not every business is required to carry bond agreements. Only companies involved in certain industries need this type of guarantee. Not sure if your business needs this type of protection? Then make sure you review your state’s guidelines or speak to an experienced insurance professional for assistance.
Not sure if your business requires bond insurance or simply curious to learn more about this unique type of coverage? Then turn to the professionals at Premier Risk, LLC. Our dedicated team of insurance experts is ready to assist with all your coverage needs. Contact us to get started today.