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What is a Surety Bond?


A surety bond is a contract between three parties—the principal (you), the surety (us) and the obligee (the entity requiring the bond)—in which the surety financially guarantees to an obligee that the principal will act in accordance with the terms established by the bond.

Which surety bond do I need?

SuretyBonds.com offers instant official surety bond delivery by email 24/7 for hundreds of surety bond forms. Select your state below to find which surety bond you need now! If you need help determining which surety bond you need, call 1(800)308-4358 to speak with one of our friendly bonding company experts who will walk you through your surety bond requirement.

What is the purpose of a surety bond?

The purpose of a surety bond is to guarantee a specific obligation will be fulfilled by bringing 3 parties together in a mutual, legally binding contractual agreement.

  1. The principal is the individual or business that purchases the bond as a guarantee they'll fulfill an obligation.
  2. The obligee is the entity that requires the bond to guarantee the fulfillment of an obligation and reduce the likelihood of financial loss due to noncompliance.
  3. The surety is the insurance company that issues the bond and guarantees the principal business or individual's obligation. 

How does a surety bond work?

If a principal fails to fulfill their obligation according to the terms of their surety bond, harmed parties (typically the obligee or consumers) can file a claim against the bond to recover their financial losses. The issuing surety company will pay valid claims up to the full bond amount as outlined on the form's legal language. The bonded principal must then reimburse their surety company in full. 

Watch the video below for answers to the questions “What is a surety bond?” “How does a surety bond work?” and "Who needs a surety bond?"

What does it mean to be bonded under a surety bond?

Being “bonded” means you purchased a surety bond that guarantees you will fulfill some sort of task or obligation, which is sometimes required by a legal contract, court order, or legislated licensing requirement. With a few exceptions, nearly all surety bond forms must be filed directly with the obligee that enforces the surety bond requirement. 

What is the difference between a bond and a surety?

The surety is the entity (typically an insurance company) that issues the bond and guarantees its obligation. The bond is the form that outlines the specific task or obligation guaranteed by the surety. The obligation(s) guaranteed by the bond is determined by the obligee that requires the bond.

Who does a surety bond protect? 

The protection provided by a surety bond varies depending on the exact language used on each individual bond form. Generally speaking, 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).

What are the types of surety bonds?

There are 4 main types of surety bonds that can be issued by a surety company. SuretyBonds.com offers thousands of individual surety bond forms online 24/7 across the 4 surety bond types.

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

What is an example of a surety bond?

How do I know my surety bond requirements?

If you have questions about your surety bond requirement, contact the entity requiring you to be bonded. Your obligee probably falls into one of the following categories.

  • federal, state, county, city, or other local regulatory authority requiring a commercial surety bond, possibly for licensing
  • construction project owner/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 find it online 24/7 and complete the bonding process quickly and easily.

Who buys surety bonds? 

Individuals need to buy surety bonds as a guarantee they'll fulfill some sort of task or professional requirement. You might need to buy a surety bond in the following situations. 

  • You're trying to get a professional license, possibly as a business owner for a new small business. 
  • You're trying to show financial responsibility that you'll pay some sort of bill (such as a tax bill or utility bill), in full and on time. 
  • You're trying to guarantee your ability to fulfill a contract or court obligation according to specific legal terms.
  • You're missing ownership paperwork for a vehicle or bank financial instrument you own.

SuretyBonds.com offers the fastest and easiest online surety bond purchase process. Find your bond online now to get started!

How does the surety bond process work? 

SuretyBonds.com offers hundreds of surety bond forms for online purchase 24/7 with instant official document delivery by email. If your surety bond requires underwriting to determine pricing, you can apply for your bond online 24/7. You'll need to provide whatever personal information your obligee requires for bond filing approval. After you've submitted payment, your bond will be issued and delivered to you based on your obligee's filing requirements. 

If you have questions about the purchase process, call 1(800)308-4358 to speak with a friendly bonding company expert.

How fast can I get a surety bond? 

Our industry-leading technology and responsive customer service team allow us to offer free quotes and deliver your official surety bond faster than any other surety provider or insurance company. Your official surety bond will be delivered according to your obligee's filing requirements. 

SuretyBonds.com offers instant official surety bond document delivery by email 24/7 whenever possible. We always verify bond delivery and filing requirements with every individual obligee that requires a surety bond to guarantee the fastest possible delivery for you. If your obligee requires your surety bond be physically issued and shipped to you, we'll deliver it to your preferred mailing address. 

With SuretyBonds.com on your side, you don’t have to wonder, "What is a surety bond?" any more. 

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