Most people are knowledgeable about insurance but know little about bonds or the different types of bonds. For businesses and some individuals, bonds are important. They provide a safeguard against unfulfilled promises for work done or for accidents or injuries suffered by workmen or those who hire them.
One of the types of bonds is a performance bond. This kind of bond is a sort of guarantee of a successful completion of a project by a contractor. Most of the time, a bond is required to bid on certain jobs. This is a form of security for completion of the job. If the contractor fails to complete the job according to certain specifications, the client is guaranteed to get paid compensation up to the amount of the bond.
Another of the types of bonds is a construction bond. These bonds provide some protection against unforeseen events that could interfere with the completion of the construction. These events could include the contractor going broke or not completing the job to specifications. Many construction bonds guarantee subcontractors will be paid if the main contractor goes out of business.
Yet another of the types of bonds is notary errors and omissions insurance. These bonds are used to protect against notaries who may not require sufficient identification before verifying signatures. Of course, this kind of mistake can prove to be very costly in some instances. This kind of bond provides some protection against these mistakes.
Licensing bonds are another of the types of bonds that insurance companies can provide. Some professions require bonds for licensure.
One difference between bonds and insurance is that with insurance, risk is spread over a number of people with the same kind of insurance. With bonds, the risk is assumed by the person buying the bond and not with an insurance company.
This information about types of bonds has been brought to you by Corriveau Insurance Agency. We’re an independent insurance agency in Nashua, NH. We’re a family owned business since 1912. Call us for a review of your insurance needs. Call 603-883-5528 today!