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What is Bond Insurance?
Bond insurance (also known as "financial guaranty insurance") is a type ofinsurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or security.
What is a monoline insurer?
monoline insurance. noun. a type of insurance for securities and bonds to cover the interest and principal when an issuer defaults; also called monoline. In 2007, amid a housing market decline, monoline insurers suffered losses from insuranceof structured products backed by residential mortgages.
What does the bond cover?
A bond is an obligation of the surety company (the company issuing the bond) to protect one person (a.k.a. Obligee) against financial loss caused by the acts of another (a.k.a. Principal). ... Performance Bonds are to insure that the contractor performs the work they are contracted to perform.
How does insurance on municipal bonds work?
Municipal bond insurance companies guarantee that the interest and principal of amunicipal bond will be paid on time if the bond issuer is unable to do so. In the event of a default, the insurance company makes the payments to ensure that investors receive their principal and interest earnings promptly.
What is a surety bond for a business?
A surety bond ensures contract completion in the event of contractor default. A project owner (called an obligee) seeks a contractor (called a principal) to fulfill a contract. The contractor obtains a surety bond from a surety company.
How do I get my cleaning business bonded?
In order to be a licensed and bonded cleaning business, maid service, or janitorial company, you have to do the following:
Step 1. File a "Doing Business As" or business license application with your local municipal government and open a business bank account
Step 2. Check the Small Business Administration's Licenses and Permits page to see if you are required to have cleaning license to work in your area.
Step 3. File necessary applications to become a licensed cleaning business.
Step 4. Contact insurance companies about License Bonds and Surety Bonds. You can submit an insurance application here to get free quotes for your cleaning business.