Not Your Average Bond

Denise GillinBonds, Risk Management

By Lynne W. Cook for AssuredPartners

Ironically, there are thousands of surety bonds, but most people are unfamiliar with this three-party agreement that is designed to guarantee a principal’s (the #1 party, which is likely you or your business) integrity, honesty, performance, and financial responsibility, as well as compliance with a law or contract.

So, who are the other two parties involved in this three-party agreement and what is it that requires I get a bond? Here are a few of the more common situations that use commercial surety bonds to lessen the risk of loss to the obligee (the #2 party, who is requiring the bond) by the third-party guarantor (the # 3 party, which is a corporate surety company, typically an A-rated insurance company).

Click here for common situations>>>

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