Surety Bond

11 months ago

Insurance Glossary Team

1 minute

Plain English Definition: A surety bond is a promise by a guarantor to pay one party if a second party fails to meet an obligation.

What Surety Bond really means for someone with an insurance policy

A surety bond acts as a safety net, ensuring that contractual obligations are met. It involves three parties: the principal (who performs the obligation), the obligee (who receives the benefit), and the surety (who guarantees the performance).

Surety Bond Real World Examples

A contractor obtaining a bond to ensure project completion.
A cleaning company guaranteeing service quality through a bond.
A car dealer obtaining a bond to meet licensing requirements.