When people think of “bonds” they typically think of the popular investment vehicle one would secure at a bank. However, bid bond insurance works a bit differently. Bid bond insurance can work as a type of investment, but it is designed to help businesses, investors, and other stakeholders. Bond insurance offers businesses the opportunity to work with investors and other businesses to “borrow” resources in order to help them to grow, similar to a loan. Much like a loan, the creditworthiness and credit rating of a business is considered in this process in order to determine the overall risk. To learn more about how bid bond insurance works, or for the different types of bid bond insurance available, call the team at American Insure-All today to speak with a bid bonds insurance broker in Auburn.
While bid bond insurance can be a resource used in just about any business, it is very common in the financial and construction industries. This is because one type of bid bond insurance is a “performance bond”, which is a necessity for developers and contractors. For example, a bid bond between a contractor and developer is common during the bidding process. A contractor will provide a quote or a bid to a developer. Once the developer accepts the bid, the contractor will often secure bid bond insurance in order to protect the developer from the contractor altering the bid or quote in any way. Bid bonds also guarantee the contractor’s quality of work and performance.
For more information on bid bonds for construction, performance bonds, surety bonds, call American Insure-All insurance today at (888)411-AUTO to speak with a professional bid bonds insurance broker in Auburn.