Surety Faq's

What is a Surety Bond?

A surety bond is an agreement between three parties (principal, obligee, and bonding company) that provides compensation to the obligee in the event that the principal fails to meet their specified obligation.

A surety bond can be broken up into the following two categories:

Commercial Surety Bonds: These bonds guarantee that the principal will perform their obligation per the terms of the bond. These bonds include various licenses and permit bonds which are required by state entities or regulations to perform certain services.

Contract Surety Bonds: These bonds provide assurance to the project owner (obligee) that the contractor (principal) will perform the work detailed in the agreement to acceptable specifications while paying their subcontractors and suppliers. These bonds include bid bonds, payment bonds, performance bonds, subdivision bonds, and maintenance bonds.