Surety bonds

A surety bond is an agreement between:

• the surety
• the obligee
• the principal

The bond is a guarantee that the surety will meet an obligation due to the obligee from the principal if the principal does not meet the obligation.

A bond will always protect the obligee, not the principal.

Alternatively, an insurance policy is an agreement where an insurer agrees to reimburse or indemnify an insured as a result of a loss by designated cause.