What Are Surety Bonds?

A surety bond is a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).

There are two broad categories of surety bonds: (1) contract surety bonds; and (2) commercial (also called miscellaneous) surety bonds.

Source: NATIONAL ASSOCIATION OF SURETY BOND PRODUCERS, “What Are Surety Bonds?” https://www.nasbp.org/ website. Accessed July 12, 2022. https://www.nasbp.org/getabond/about-surety

© Copyright 2022. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented.

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