Who is the Principal in a Surety Bond?

The principal of a surety bond is the person required to purchase the surety bond.

This person is likely you!

Remember, think of a surety bond as a legal contract of trust between two parties who have never worked together before.

It's purpose is to protect against fraud.

You are being required to purchase a surety bond by an obligee.

The obligee is the party that requires the surety bond of you.

The surety is the insurance company that underwrites the surety bond.

We are Surety Bonds Direct and we help you purchase a surety bond and save as much money as possible doing that.

Click here to read the full surety bond agreement breakdown.

What Does The Surety Bond Do?

In most cases the surety bond will do nothing but hold you accountable.

You'll buy it and renew it as needed and you'll never touch it or worry about it again.

But some businesses do commit fraud and in this case the customer can make a claim against the surety bond.

If that happens... the surety (insurance company) will investigate the claim to make sure it's legitimate.

If it is, the surety will pay the amount of the claim (or a portion) of it to the customer.

Many times this is done on behalf of the obligee.

As the principal, you must pay the surety back for the amount of the claim.

You are the principal and that is how the surety bond works.