What Is a Surety Bond? A Complete Guide for Businesses and Contractors
December 20, 20245 min readBy Can Do Surety Bonds
A surety bond is a legally binding agreement between three parties that guarantees specific obligations will be fulfilled. Unlike traditional insurance, which protects the policyholder, a surety bond protects the party requiring the bond.
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Request a quoteThe three parties involved are: the Principal (you, the person or business purchasing the bond), the Obligee (the party requiring the bond, typically a government agency or project owner), and the Surety (the insurance company backing the bond).
When you purchase a surety bond, you're getting a guarantee that you'll fulfill your obligations. If you fail to do so, the obligee can file a claim against your bond, and the surety pays valid claims. You must then reimburse the surety for any payments made.
Common types include Contract Bonds (for construction), License and Permit Bonds (for professional licenses), Commercial Bonds (for business obligations), and Court Bonds (for legal proceedings).
Need a surety bond? Contact Can Do Surety Bonds at (609) 491-7404 for a free quote.