A surety bond is very specialized line of insurance that is created whenever one party guarantees performance of an obligation by another party.  The surety bond operates as a contract under which one party (the surety) guarantees the performance of certain obligations of a second party (the principal) to a third party (the obligee). Imagine a contractor is building a new office building for a government agency. The agency naturally wants a guarantee that the taxpayer won’t be left out of pocket if the contractor fails to deliver the offices as promised. While surety bonds are often used for construction projects related to government agencies, it can work with any two organizations.

Common Types of Surety Bonds Include

• License and Permit Bond
• Fidelity Bond
• Business Service Bond
• Contract Bond
• Court Bond