What is a surety bond?

A bond guarantees the fulfillment of a legal obligation. It's a three-party agreement where the third party (surety company) guarantees to a second party (obligee or owner) the successful performance of the first party (principal). One of the primary uses of bonds today is to protect public and private funds from financial loss. A surety bond is not an insurance policy. It is an extension of credit with the assumption that the legal obligation will be fulfilled, and consequently, there will be no loss.

Why do I need a surety bond?

For example, license bonds protect the public from business misconduct. Contract bonds protect taxpayers by guaranteeing that projects are completed properly, on time and without liens. Court, public official, government and miscellaneous bonds protect and secure public funds and private interests.