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The Difference Between Bonds And Commercial Liability

A bond is in fact different from commercial liability insurance primarily because of who is protected.  You should also note that a bond covers only for specific obligations, unlike liability insurance which is a broader form of coverage against a range of liabilities.   Insurance Protects You, Bonds Protect Your Client Commercial liability insurance is purchased by you the business owner, and it protects you and your business, in the event of a claim.  The insurer will cover your costs based on determining the value of a claim and paying a claimant, or by providing legal representation to your company in the event of a lawsuit. A bond is purchased by you the business owner, but it protects your contractor or client, in the event you fail to meet your obligations to the client. The surety or guarantor (the insurance company issuing the bond) agrees to pay the obligee (the party who is the recipient of an obligation) if the principal (the primary party who will perform the contractual obligation – that’s you) fails to meet your obligations under the contract with the obligee.   Understanding The Scopes of Coverage Commercial liability insurance covers for a wide range of potential incidents, including bodily injury and property damage on your premises or on a job site.  For a full list of coverage types, check out our Insurance Coverage page or contact our team. A bond covers contractual obligations only, and does not cover for any type of personal injury or property damage as a result of those obligations. There are many different types of bonds, the most common being a surety bond.  This...