In commercial practices, it is common to ask if a company is insured. However, you may also hear a company indicate that they are bonded. If you are trying to decide between a company carrying an insurance policy or a bond, here is some information that might help you out.
The Differences
The types of coverage provided by these two financial services is one of the primary differences between the two. An insurance policy is a type of risk management secured by a contract between an insurance company and the insured. The insurance provider makes a promise to the policy holder that they will be compensated in the event of a covered loss (as outlined in the contract).
With a fidelity bond, such as an employee dishonesty bond, it is an insurance policy that cannot be traded nor can it collect interest like a surety bond. These can either …
