DEFINITION of 'Act Of God Bond'

A bond issued by an insurance company, linking principal and interest to a company's losses due to natural disasters. Act of God bonds are issued by insurers to protect against unforeseen events.


Such bonds create flexibility for insurance companies if an unforeseen natural disaster occurs. Because principal and interest depend directly on losses resulting from natural disasters, the insurance company can soften the financial strain by delaying, reducing or eliminating payment of the bond.

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  2. Insured Bond

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  3. Principal

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  4. Guaranteed Bond

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  5. Catastrophe Insurance

    Catastrophe insurance protects businesses and residences against ...
  6. Catastrophe Accumulation

    The losses that an insurer or reinsurer may face across a geographic ...
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