Blog

Is there a Difference Between Surety Bonds and Insurances?

Have you been told that a surety bond is the same as insurance?  Or that insurance is better than a surety bond in the field of construction?  There are contractors, who feel, that construction bonds are not necessary in order for their business to succeed.  Unfortunately, these are often the same contractors who do not see as much business growth as bonded contractors.  All public construction projects required surety bonds.  Since the public construction sector is a reliable industry it is an industry worth working in.  In addition, in recent years, many private sector construction jobs have also began to require surety bonds. What are the main characteristics of insurances and surety bonds? First, we would like to debunk the myth that bonds and insurances are the same thing.  Many people assume, incorrectly, that the term “bonded” and “insured” are interchangeable.  In the case of the contractor, an insurance policy usually refers to liability insurance or workers’ compensation.  They do not protect the project owner, but rather the workers.  For many clients, hearing that a contractor is also bonded, gives the project owner confidence that they will be protected, in the case that the contract is not satisfactorily completed....