Surety Bond Insurance
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Surety is a form of financial credit known as a bond guarantee. A surety protects the obligee which is the party to whom the bond is paid in the event of a default against losses, up to the limit of the bond. This result from the principal which is the party with the guaranteed obligation failure to perform its obligation.
Further info on definitions for Surety Bonds
- Principal: The individual or business that purchases the bond to guarantee future work performance.
- Obligee: The entity that requires the bond. Obligees are typically government agencies working to regulate industries and reduce the likelihood of financial loss.
- Surety: The insurance company that backs the bond. The surety provides a line of credit in case the principal fails to fulfill the task.
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