What does Bond Insurance mean?

Bond Insurances are usually bought by bond certificate issuers as a protective measure both for themselves as for their buyers. It simply implies that in case of failure, the insurance company assures reimbursement of the initial capital plus interests towards the holder. It also constitutes an advantageous purchase for the bond issuers, as this will certainly better their credit rating.

Bond Insurance explained

Firstly, bond issuers by bettering their credit reports will not have to pay such a high interest, and secondly being insured against a default means there will be fewer cares for the issuer. Secondly, the customer, the bondholder will also be somewhat protected, because a default will not mean a total loss of capital and interests, and instead they will receive payment of these.