Businesses may consider bond insurance for protection, and in many cases, may be required to purchase this coverage. While surety bonds may be referred to as bond insurance, they aren’t an insurance policy in the true sense, though insurance companies often sell them.

In an interview with Fortune Magazine, Partner Otto Larson explained the industries and types of businesses that commonly need bond insurance.

“Contractors and construction companies are commonly asked to post a bond when working on medium and large sized jobs,” Otto said. “Owners and general contractors will ask for Bid and Performance Bonds to guarantee that projects are completed, and completed on time. There are many other industries that require bonds as well.”

Other professionals, such as tax preparers, house cleaners, car dealers, mortgage lenders, and others, might also need them.

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