What is a Surety Bond?

Surety bond specialist

If you own your own business, or help manage a company, it is very possible that you have been asked to post a surety bond. There are three parties involved in every surety bond transaction. The person or company asking you to post the bond is called the obligee, while you or your company is referred to as the principal. The surety bond specialist works for the company who issues the bond, connecting both obligee and principal together. An experienced surety bond specialist can help you choose the correct type of bond for your needs, as well as answer questions specific to you and your business, to help you get a better understanding of what it is that is being asked of you.


A surety bond is not insurance—instead, it is a type of credit extended by the surety company that covers the obligee in the event you are unable or unwilling to follow through with whatever the bond guarantees. This failure could represent a variety of actions: from failing to complete a project, to failing to follow specific laws, or other requirements. In the event you default on your guarantee, the obligethat is, the person who requested the bondcan then file a claim with the surety bond company and request compensation. The surety bond company will pay the claim, and then request that you, the principal, reimburse them.