Surety Bond

Surety Bond
Surety Bond

Surety Bond Insurance

A Surety Bond is an agreement between 3 parties, the “principal”, the “surety” and the “obligee”. Surety bonds are most commonly used in construction contracts or in servicing contracts.

It is issued to provide a guarantee to the client that the contractor will be able to fulfill the obligations of the contract. In this arrangement, the obligee is the owner of the project and the principal is actually the contractor who is supposed to fulfill the obligations.

Surety bonds can be in 3 forms:
  • Bid Bonds
  • Performance Bonds
  • Payment Bonds