Construction Bond Insurance

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What is Construction Bond Insurance?

Construction Bond Insurance is a written obligation provided by a guarantor (typically an insurance company or a bank) and are used primarily to protect the owner (obligee) from financial loss in the event that the contractor (principal) fails to fulfil the terms and conditions of their contract.

It secures the fulfilment of contractual, commercial or legal obligations.

Construction Bond Insurance is distinctive from a traditional insurance contract in that the guarantor holds recourse rights against the bonded or guaranteed company and can recover any payment made under the bond from that company.

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