Surety Bonds

What is a Surety Bond?

A surety bond is a legally binding agreement that involves three distinct roles:

  1. Obligee: This is the party or entity that requires a promise or guarantee to be made. They want assurance that certain obligations will be fulfilled.

  2. Principal: The principal is the party who makes the promise or commitment. They are typically the ones required to fulfill specific obligations or adhere to certain rules and regulations.

  3. Surety: The surety is a third party, often an insurance or bonding company, that steps in to provide financial backing and assurance that the obligations outlined in the bond will be met. They act as a safeguard, ensuring that the principal fulfills their commitments as agreed upon in the bond.

In essence, a surety bond creates a structured arrangement where the obligee can trust that the principal will carry out their responsibilities, with the surety company serving as a financial safety net should the principal fail to meet their obligations.

What does a surety bond cost?

In order to obtain a bond, you’ll be required to pay a bond premium, which is typically a small percentage of the total bond amount. This percentage varies from one applicant to another and is influenced by several factors. These factors include the specific type of bond you’re seeking, your credit score, financial statements, and various other considerations.

Most Common Surety Bonds

Court Bonds

Fiduciary Bond

Guardianship Bond

Injunction Bond

Bankruptcy Trustee Bond