In simple terms, a surety bond is a third party financial and/or performance guarantee of a contract or other legal obligation between two parties.
While there are hundreds of bond types, the most common types are bid bonds, performance bonds, payment bonds, license bonds, estate administrator bonds, and appeal bonds.
The three parties to any surety obligation are:
1) the Surety who guarantees the obligation
2) the Principal who is the surety’s client and must perform the obligation
3) the Obligee to whom the bond benefits should the Principal fail to fulfill their obligation.
There are three broad market segments in the surety industry that serve different types of clients. These segments are construction companies, commercial or non-construction companies, and attorneys whose clients have various types of bond needs.
Contact me to discuss more about Surety Bonds.