What are the differences between subcontractor default insurance and bond in terms of providing financial protection against subcontractor defaults?

Subcontractor default insurance and bonds both provide financial protection against subcontractor defaults, but they work in different ways. Subcontractor default insurance reimburses the general contractor for costs incurred due to a subcontractor default, while bonds guarantee that the subcontractor will fulfill their obligations. Bonds require a third-party surety to pay if the subcontractor defaults, while insurance is a direct reimbursement to the general contractor.