Bond insurance provides a vehicle for businesses to invest in other businesses, similar to how a loan works, in exchange for scheduled interest and principal payments. And in order to protect the investment of a business or investor, the bond issuer secures bid bond insurance to ensure that the investor or stakeholder continues to receive scheduled payments even in the event of default. To learn more about how bid bond insurance works, call the team at American Insure-All today for a bid bonds insurance broker in Kirkland.
Working with a reputable and experienced insurance broker can help businesses and investors to not only understand how the process works but also to guarantee an investment in another business or entity. Bid bond insurance is also known as surety bonds, which is a risk mitigation tool and are also a form of credit. For example, a bond issuer will also secure bond insurance in order to ensure the repayment of principal and interest payments are paid to all bondholders should a business default.
While bid bond insurance can be a resource used in various industries and to help various businesses, it is most commonly associated with the construction and financial industries. A bid bond ensures that a developer is protected from a contractor altering or increasing an initial bid or quote on a project. Bid bonds also stipulate that the contractor will secure other necessary performance and payment bonds required throughout the project in order to guarantee work and performance, ultimately protecting the developer’s investment and ensuring the quality of the project as a whole.
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 bid bonds insurance broker in Kirkland.