The primary benefit of bonds over a security deposit are that they don't tie up the cash funds for the duration of the works.
Like all bonds and insurance policies, the primary drawback is that even if the 'peril' doesn't come to pass, the cost of the policy or bond is lost. While there might have been a perceived benefit in not having funds tied up, the net cost to the building owner was almost certainly higher.
We are not aware of any party wall bond suppliers currently operating in the UK market.