Bond Insurance

-What is a surety bond

A surety bond is simplest form as a written agreement to guarantee compliance, payment, or performance of an act. It involves a three-party agreement between the:

  • Principal – the party that purchases the bond and undertakes an obligation to perform an act as promised.
  • Surety – the insurance company or surety company that promises to  perform, should the principal fail to render services resulting in a contractual liability loss.
  • Obligee – the party who requires, and often receives the benefit of— the surety bond. For most surety bonds, the obligee is a local, state or federal government organization.
Who buys Surety bond
 
  Normally a Surety bond is purchased by an individual or business entity seeking to comply to state or federal law in order to get license or permits for example: Tax Professionals, Construction Contractors, Restaurant owners, Beauticians, Mortgage brokers, Credit repair Specialists, auto dealers, private investigators, etc.