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
Requirement of state approval of property insurance rates and policy forms before they can be used. Individual states regulate insurers and approve their rates. There are three methods of ...
Payment to the seller over the seller's life expectancy for the sale of the seller's assets. This procedure provides for the immediate removal of assets that have appreciated from the ...
Protects a cedent against an aggregate amount of claims over a period, in excess of a specified percentage of the earned premium income. Stop loss reinsurance does not cover individual ...
Insurance coverage sold by a broker as contrasted with insurance coverage sold by an agent. ...
One named under provisions of the employee retirement income security act of 1974 (erisa) for a terminated pension plan with an unfunded liability for its benefits. ...
Circumstance which increases the probability of loss because of an applicant's personal habits or morals; for example, if an applicant is a known criminal. ...
Option under a participating life insurance policy by which the policy owner can elect to have the dividends purchase paid-up increments of permanent insurance. ...
Small business retirement plans created by the Small Business Job Protection Act of 1996. These plans permit small business owners who have fewer than 100 employees to establish an employee ...
a contract in life insurance that includes elements of whole life and term insurance. in pensions, a combined life insurance policy and a side (auxiliary) fund to enhance the amount of a ...
Have a question or comment?
We're here to help.