A surety bond is an instrument of guarantee issued by the Surety on behalf of the Principal and for the benefit of the Obligee. The bond guarantees that the Principal will perform their obligations as legally or contractually required by the Obligee. In simpler terms, the Surety is standing behind the Principal’s commitment to the Obligee just like a cosigner would and would step in and be responsible should the Principal fail to perform their obligation.
First, determine what type of bond you will be needing. Second, complete the appropriate application or questionnaire: Contract, Subdivision, Commercial, or Fidelity/Court. Three, submit the application or questionnaire along with the required supplemental information. This information typically would include financial statements and the documents necessary to understand the bonded obligation such as contracts, agreements, licenses, and required bond forms.
Indemnity is an agreement of the Principal to hold the Surety harmless from all loss and expense resulting from a bond claim. Suretyship is as much a financial relationship as it is an insurance relationship. The Surety will require restitution from the Principal and those signing the Indemnity Agreement, should they experience a loss resulting from a default of the Principal’s obligation guaranteed by the bond.