Municipal Bond Insurance

What Does Municipal Bond Insurance Mean?

Municipal bond insurance offers financial reimbursement to a party in the event of a default on a municipal bond. This type of insurance is intended to instill confidence in policyholders, encouraging them to participate in municipal projects such as constructing bridges, roads, or schools.

Insuranceopedia Explains Municipal Bond Insurance

Municipal projects often involve significant costs; for instance, constructing a single high school can require tens of millions of dollars. Given the substantial financial stakes, municipal bond insurance plays a crucial role in mitigating the risk of default and its associated losses.