Contract Bond
Definition of "Contract bond"
A guarantee of the performance of a contractor. In general, contract bonds are used to guarantee that the contractor will perform according to the specifications of the construction contract. If the contractor fails to perform according to contract, the insurance company is responsible to the insured for payment, up to the limit of the bond, which is usually for an amount equal to the cost of the construction project. The insurance company then has recourse against the contractor for reimbursement.
Popular Insurance Terms
Provision in the extended coverage endorsement stating that smoke damage is covered when it results from the sudden, unusual, and faulty operation of an on-premises cooking or heating unit, ...
Form of state rating legislation that allows each property/liability insurer to choose between using rates set by a bureau or its own rates. Individual states regulate insurers and approve ...
Means of selling and servicing property and casualty insurance through agents who represent different companies. The agents own the records of the policies they sell. ...
Loss of a key person due to death, disability, sickness, resignation, incarceration, or retirement. Because of the expertise of such an individual, there could be a loss of income, market ...
Coverage for items of property being delivered to a customer. The means of transportation covered include such common carriers as aircraft, railroads, trucks, express carrier, and other ...
Latin for "Let the superior reply." That is, an employer is liable for the torts of employees that result from their employment. For example, an insurance company (the master) acts through ...
Income supplement program under Social Security to provide a minimum monthly income to aged, blind, and disabled persons. The SSI payments, which were introduced in January 1974, make up ...
Coverage for a shipper (owner/sender) for property damage or loss of goods in transit through the post office. A trip transit insurance policy specifically excludes coverages on property ...
Insurance coverage that protects a contractor or other type of business providing a service for expenses incurred in the event a contract is not ratified by a foreign government. For ...
Have a question or comment?
We're here to help.