Insurance Bonds

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What is an Insurance Bond?

An insurance bond ensures contract completion in the event of contractor default and are typically required by project owners when seeking a contractor to fulfill a contract. 

The contractor obtains a bond so the insurance company is obligated to compensate the project owner for the financial loss incurred if the work is not completed. ​

Surety vs Fidelity Bond

Surety bonds serve to protect the obliged party against losses that result from the failure of the principal to meet their obligation. ... Though fidelity bonds are known as bonds, the coverage they supply functions more accurately as a traditional insurance policy rather than a surety bond.

Source: https://contract-law.laws.com/contract-law/surety-bond/fidelity-bonds-vs-surety-bonds

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