Bond

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Bond Financial guaranty by an insurer guaranteeing scheduled payments in an event of default payment by the bond issuer. There are two general categories of bonds; 1) Commercial Bonds: The vast majority of bonds falls under the license and permit surety bond type. This inc
ludes businesses such as Auto Dealers, Collection Agencies, Mortgage Brokers and Telemarketers. These bonds are used to guarantee that the individuals or businesses abide by the rules and regulations of their business license. 2) Contract Bonds: Typically used for construction work, these bonds guarantee that the job will be completed as per the terms of the contract and are normally required by law on construction work for public bodies. Being bonded means that an insurance and bonding company has procured funds that are available to the customer contingent upon them filing a claim against the company. If you are a contractor or other type of business owner, you may have good reason to explore what it means to be surety bonded. The difference between a bond and insurance is that; Insurance protects the business owner, home owner, professional, and more from financial loss when a claim occurs. Bonds is a form of credit that protect the obligee who contracted with the principal to perform specific work (in the case of a surety bond) on a project by reimbursing them when a claim occurs. A bond does not protect the buyer of the bond (the principal), but does protect a third party (the obligee) from exposure to loss. For example a surety bond requires the surety to pay a set amount of money to the obligee if a principal fails to perform a contractual obligation. One of the most popular of all sureties is the license and permit bond. This type of bond is often required by states as a pre-condition to obtaining a license to operate, and it offers significant assistance to the general public in situations where they might need the services of a professional. The cost of a bond depends on many factors, including the type of bond needed, industry experience, the financial stability of the entity or employee being bonded, credit score, and more. Mostly however, it depends on the contract amount of the bond. Most bonds cost somewhere between .5% and 20% of the value of the bond. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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