The law of large numbers is the rule applied to most primary insurance lines of coverage. This rule presumes that sufficient premium is collected from all policyholders to cover the losses of the few. Pooling premiums to respond to injury or damage sustained by certain members of that pool is how insurance works
While surety bonds and insurance policies are similar in some respects, there are some very distinct differences. Besides having different contract language, the forms vary in the coverage they provide. Please refer to this Section, Comparison: Surety Versus Insurance, for more information on some of the more important differences.