Still, there are some important ways that bonds differ from insurance. While they will offer a settlement to affected parties, they don’t necessarily guarantee financial protection to the bond carrier.
If a bond company pays a claim on your behalf, you still have a financial obligation. You must repay the bond company for the cost of the claim. So, in that regard the bond is different from your standard insurance. Rather than getting off scot-free, you’ll still face a potential for financial loss because you must repay your client.