What is the definition of Bond?

A Bond is a security that holds the issuer responsible for repaying the principal amount when the loan matures, as well as paying interest at a specified period within the duration of the loan.

For insurance, it is a form of surety, since insurance guarantees payment for losses. Insurance will reimburse and pay for financial losses because of failure to perform, dishonesty and other acts that affect the business.

The government, the different states, municipalities and companies make use of bond to fund their activities and projects. As such, bonds fall under the three main asset classes, which also include cash equivalents and stocks.

The interest offered depends on the duration of the bond as well as the credit quality. Bond maturities may last as quickly as 90 days (or Treasury bills) to 30 years (for government bonds). Typically, though, these last from 3 to 10 years.

• Reinstatement
• Registered Principal
• Liquor Liability
• Businessowners Policy (BOP)
• Directors and Officers Liability Insurance