Surety Bond Definition
A Surety Bond is an agreement subject to the Bond Form. The Surety Bond is usually required for monetary compensation for failure to perform specified acts referenced in the Bond Form. A Surety Bond is a generic name for all bonds. Surety Bonds are usually required by the state or Federal Government; these bonds are called License & Permit Bonds.
There are three parts of a Surety Bond, the first is the Obligee. They are the entity requiring the Bond. Second is the principal. The Principal is the person whom will perform the contractual obligations set forth in the Bond Form.
The third part is the Surety Company. They are the entity who will be insuring the Bond