What is a Surety Bond?
A surety bond is a three-party agreement that guarantees a business or individual will fulfill their obligations. If they don't, the bond provides financial protection to the party that required it. Surety bonds are commonly required for business licenses, permits, construction projects, and court proceedings.
Same-day quotes. A-rated markets. Expert help.Every Surety Bond Has Three Parties
The Principal
The person or business required to obtain the bond. The principal purchases the bond and is responsible for fulfilling the obligations it guarantees.
The Obligee
The government agency, entity, or project owner that requires the bond. The obligee is protected if the principal fails to meet their obligations.
The Surety
The insurance company that issues the bond and guarantees payment to the obligee. If a valid claim is filed, the surety pays the obligee and the principal must repay the surety.
Types of Surety Bonds
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