WHAT DOES BOND INSURANCE COVER?
Insurance bonds are used on certain contract jobs and help ensure that all parties are protected if the job is unable to be completed as planned. Also known as surety bonds, this type of coverage is most often employed on construction jobs or work with a government agency.
Some companies and government agencies require contractors to have a surety bond. If the company contracted, the principal defaults, or otherwise fails to complete the job, the surety company will cover any losses that are owed to the entity that hired the contractor, aka the oblige. The surety company may also find another contractor to complete the job and will ensure that the workers and subcontractors of the principal are still compensated for their work.
Surety bonds are great for protecting both sides on contract work, and there are a variety of surety bonds for different situations. The type of insurance bond you need will depend on the work you are doing as well as specific state and municipal laws. Kentucky Shield can help you figure out what bond fits your specific job and answer any other general questions you may have about insurance bonds. Contact us today to get started on protecting your business.