Bonds Vs. Insurance policies

Far too often insurance clients needing a bond or bonds believe that purchasing these contracts are just like buying an insurance policy. This is far from the fact of the matter. Insurance policies and bonds are purchased through insurance agents but there the similarity ends. Bonds are financial guarantees. Insurance policies are not! This is the big and major difference.
Too often clients will call an agent and say write me a bond.They then become irritated when the agent says that quite a bit of financial information is required. Bonds are underwritten to a zero loss ratio. This means that the insurance company never plans on paying a claim. This is especially true of contractor's performance bonds. Insurance policies on the other hand are written with the anticipation that losses will occur. Insurance companies do write bonds but require a financial statement from the client along with a company history including resumes on the owners. The insurance companies are very strict in their underwriting on bonds.
So when in the market for a bond or bonds get your material ready and be patient.