Many don’t realize that there is a difference between bonds and bid bond insurance. Bonds are typically known as an investment option that one would purchase through a bank. However, bid bond insurance is a business investment and protection vehicle. Bid bonds insurance can help grow and protect businesses regardless of industry. To learn more, call the team at American Insure-All today for bid bonds insurance broker in Snohomish.
What is Bid Bond Insurance?
A business or investor can purchase bond insurance to ensure that payments are made on time and on a regular basis. Additionally, if a business defaults on scheduled payments, then bid bond insurance ensures that the investor continues to receive interest and payments. Because there is a great deal of risk involved in these type of agreements, credit background checks are performed on a business as a part of the bond insurance purchase process.
What Are the Advantages of Bond Insurance?
Depending on the agreement, bid bond insurance can offer a layer of protection for businesses and investors, and can even help businesses that act as the bond issuer grow and develop. For example, by establishing a “bond” with an investor, companies can leverage an investor’s resources to make improvements, updates, and further grow and develop while also mitigating financial risks associated with such an expansion.
In another example, bid bond insurance can also serve as a vehicle in a contract situation. For example, a developer might enter an agreement with a contractor for a particular project or type of work. In order for a developer to protect the organization against a contractor increasing a quote after the bidding process, a developer and contractor will often enter an agreement in which bid bond insurance is purchased to serve as a layer of protection for both entities.
Some of the common types of bid bond insurance include:
– Contract performance bonds
– License and permit bonds
– Payment bonds
– Bid bonds
– Supply bonds
– Maintenance Bonds
– And many more…
For more information on bond insurance, call American Insure-All today at (888)411-AUTO to learn more about working with a bid bonds insurance broker in Snohomish.