bond insurance

Bond insurance is a financial product that guarantees the repayment of bonds issued by entities like cities or companies. If the issuer faces financial difficulties and can't pay interest or principal, the insurance company steps in to cover those payments. This assurance lowers the risk for investors, often leading to lower borrowing costs for the issuer and making the bonds more attractive. Essentially, bond insurance acts as a safety net, providing added security for bondholders and helping issuers access funding more easily.