AFSB Practice Questions - AFSB Associate In Fidelity And Surety Bonding Exam

Which of the following best distinguishes surety from traditional insurance?

Surety contemplates expected losses; insurance does not Surety is a three-party arrangement that contemplates zero losses, while insurance is a two-party transfer of risk Insurance involves indemnity from the insured; surety does not Insurance and surety are functionally identical legal contracts

Correct Answer:

Surety is a three-party arrangement that contemplates zero losses, while insurance is a two-party transfer of risk

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