A surety bond, at its most simple description, is a financial instrument that binds an individual to performing a particular obligation. Not doing the job as agreed upon allows for the breaking of the bond, and the money to be paid out to a specified recipient. Surety bonds are typically issued by an insurance company to those seeking a third party to insure that the work will be performed to specification. There are three parties to a surety bond:
- Obligee - the individual or party who is to receive the fruits of the contractual obligation.
- Principal - the individual or party who is performing the contractual obligation.
- Surety - the entity that guarantees the obligee that the principal is capable of performing the task at hand.
Surety bonds are used in a variety of ways such as a judicial bond, license and permit bonds, fidelity bonds and more. As an example: someone has been arrested and given bail. The individual can post bond as a surety of their appearance in court on the specified date. If that individual fails to show in court, the bond is broken and the money within the bond is used to pay the court. If you are in the Vacaville area and interested in a surety bond, contact Gateway Professional Insurance Services
for more information today.