What Is a Surety Bond?


A surety bond is a financial guarantee that contractual obligations will be met. It is a three-party agreement between the principal (you), the surety (us) and the obligee (the entity requiring the bond).

What Is the Purpose of a Surety Bond?

The purpose of a surety bond is to financially guarantee the fulfillment of a specific obligation by bringing three parties together in a legally binding contract. They protect the government, businesses and individuals from monetary loss by holding bondholders liable for their professional or personal obligations.

The 3 Parties in a Surety Contract

  1. Principal: The individual or business who will perform the obligation
  2. Obligee: The entity requiring the bond to guarantee fulfillment of the obligation
  3. Surety: The provider that issues the bond and financially upholds the obligation on behalf of the principal

How Does a Surety Bond Work?

Obligees, typically government agencies, require surety bonds to avoid potential financial loss. If a principal fails to meet their bond terms, the surety protects consumers and public entities from resulting losses. 

Surety providers, such as SuretyBonds.com, financially guarantee a principal’s capacity to meet the bond obligation. Valid claims against a surety bond are paid by the surety up to the full bond amount. The surety then recoups the cost from the bonded principal. 

When Do You Need to Buy a Surety Bond?

Individuals need to buy surety bonds as a guarantee they'll fulfill a contract, task or professional requirement. Here are some common situations in which you might need to get a surety bond: 

  • You're applying for a professional license, possibly as a new business owner 
  • You're trying to show financial responsibility that you'll pay a bill (such as a utility bill), in full and on time 
  • You're trying to guarantee your ability to fulfill a contract or court obligation 
  • You're missing your vehicle title or ownership paperwork for a financial instrument.

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Which Surety Bond Do I Need?

Surety bond regulations vary from state to state, and even by county. The best way to determine your surety bond requirement is by contacting the obligee. Your obligee probably falls into one of the following categories:

  • Federal, state, county or city regulatory authority requiring a commercial surety bond
  • Construction project owner or contractor requiring a contract surety bond
  • Federal, state, county or municipal court requiring a court surety bond

Once you know which bond you need, you can easily apply online. SuretyBonds.com offers instant digital delivery for hundreds of bonds. Select your state below to find the surety bond you need:

What Are the Types of Surety Bonds?

There are thousands of surety bonds, but most fall into one of four main categories:

  1. License and Permit Bonds are required as part of city, county, state or federal licensing processes. 
  2. Construction Bonds are required to ensure construction projects are completed according to terms.
  3. Commercial Bonds are required to guarantee professional obligations that are not tied to licensing requirements.
  4. Court Bonds are required to ensure individuals fulfill their court-appointed duties.

SuretyBonds.com offers the quickest and easiest process to get any of these types of surety bonds. Find the one you need:

What Does It Mean to be Bonded Under a Surety Bond?

Being “bonded” means you purchased and filed a surety bond. This guarantees you will fulfill a specific obligation, which is sometimes required by a legal contract, court order or licensing requirement.

Who Does a Surety Bond Protect? 

Surety bonds protect consumers and government entities from financial loss in the event a bonded individual, business owner or company fails to fulfill their professional obligation(s).

Where Do You Get a Surety Bond?

You can purchase a surety bond online from a licensed surety broker or agency. SuretyBonds.com is the leading surety provider in the nation, offering the fastest and easiest bonding process. Apply today to experience our best-in-class service!

Call 1 (800) 308-4358 to talk with a Surety Expert