What is the difference between an insurance policy and a bond?

An insurance policy and a bond are two different ways of providing financial protection in the event of a claim or lawsuit. An insurance policy is an agreement between an insurer and an insured person or business, in which the insurer agrees to pay a set amount of money to the insured if a specific event or claim occurs. A bond is a financial instrument that provides protection to a third party, such as a government entity or a business, from damages or losses incurred by the individual or business that purchased the bond. Insurance policies are typically issued for a specific amount of money as determined by the insurer and the insured. This amount can be paid as a lump sum, or as a series of smaller payments over time. A bond typically requires an initial investment to be made by the individual or business that purchases the bond; the size of the investment depends on the type of bond purchased. The major difference between an insurance policy and a bond is that an insurance policy is used to protect an individual or business against loss or damages, whereas a bond is used to protect a third party from any losses or damages caused by the individual or business that purchased the bond. Additionally, insurance policies often require regular payments to the insurer, while a bond does not require regular payments.

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What is the difference between an insurance policy and a bond?

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