1. Insurance Terms & Definitions/
  2. Insurance Terms Starting With B

Bond Insurance

What is Bond Insurance?

Bond insurance protects investors against default on bonds issued by governments, corporations, or other entities. This type of insurance can give investors peace of mind and make bonds more attractive. Bond insurance guarantees repayment of the principal and other associated interest payments to bondholders when a bond issuer or bond issuing companies purchase it. Bond issuing companies buy bond insurance to enhance their credit rating.