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What is a Surety Bond?

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A surety bond (pronounced "shur-i-tee bond") can be defined in its simplest form as a written agreement to guarantee compliance, payment, or performance of an act. Surety is a unique type of insurance because it involves a three-party agreement. The three parties in a surety agreement are:


The principal is an individual, business or other party that purchases the surety bond and agrees to undertake a compliance, payment or performance obligation as promised pursuant to the terms of the surety bond form or agreement.


The surety is the insurance company or surety company that guarantees the obligation will be performed. If the principal fails to perform the act as promised, the surety is contractually liable for losses sustained.


The obligee (pronounced ob-li-jee) is the party who requires and often times receives the benefit of the surety bond. For most surety bonds, the obligee is a local, state or federal government organization.

Expert Surety Bond Insights

How to Get a Car Dealer's License in Texas

Find out how to get a dealer’s license in Texas and start selling automobiles in the Lone Star State, including how to get the surety bond you need.

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How to Get Your Illinois Roofing License From The IDFPR

Learn the requirements for getting your Illinois roofing license. This post helps clear up the steps and makes them easy to follow. 

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Nevada Consumer Protection Bond (Bill no. 39) For Residential Contractors

Nevada passed Bill 39 creating a new surety bond requirement for residential contractors, but this bond can help your business. Find out the details here.

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Who Pays for a Probate Bond And How Much Do They Cost?

Yes you do have to purchase the probate bond. But it's not what it seems. Learn why you have to buy one, where the money comes from, and how to save money!

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VA Surety Bond (Veterans Affairs Fiduciary Bond)

If you're been named a fiduciary, it's like you need to get a VA surety bond. Learn what this bond is, why you need it, and how to purchase it for less.

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Administrator Bond & Executor Bond

Learn about administrator bonds and executor bonds because you were just told to purchase one. Learn what, why, and how save money purchasing yours.

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More Surety Bond Info »