Bonds Insurance is a type of insurance that provides financial protection to the obligee (the party that receives the benefit of the bond) in the event that the principal (the party purchasing the bond) fails to meet its contractual obligations or fulfill its services. It is a legal contract between the bond issuer, the obligee, and the surety (insurance company)  and provides protection for all parties involved.

Bonds provide a guarantee that projects will be completed as expected.

The types of bonds include:

• Tender Bonds: A tender bond, also known as a bid bond, is used when a procuring organization requests bids for a project and needs a bond to act as security against the possibility that the winning bidder won’t fulfill their contractual obligations.
• Advance Payment Bond: This is a down payment made by the obligee to the principal as security for the obligee’s performance of his contractual obligations.
• Performance Bonds: An insurance firm or bank will issue a performance bond as a surety bond to ensure that a principal completes a project to their satisfaction.
• Customs Bonds: These are a surety’s promises to the government that the Principal will strictly adhere to all applicable rules and regulations