Bond insurance (also known as "financial guaranty insurance") is a type of insurance were Acacia Insurance guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or security.
As compensation for its insurance, the Acacia is paid a premium (as a lump sum or in installments) by the issuer or owner of the security to be insured.
Bond insurance is a form of "credit enhancement" that generally results in the rating of the insured security being the higher of (i) the claims-paying rating of the insurer and (ii) the rating the bond would have without insurance (also known as the “underlying” or “shadow” rating).
At Acacia, we provide the following:
■ Advance payment bonds
■ Bid bonds customs
■ Bonds performance
■ Bonds retention
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