A Bond is an agreement among three parties whereby a surety (Surety Company) guarantees the performance by an individual (called the Principal) of an obligation or undertaking in favor of a third party (called Obligee). The surety company undertakes to indemnify the Obligee for whatever loss he might suffer if the Principal fails to comply with his obligations.
Types of Bonds Commonly Issued
Whenever a contract, or license or privilege is granted, the grantee assumes certain obligations and is required to perform (or not to perform) certain acts. To guarantee compliance with these undertakings, the grantee is required to give a bond.
- Bidders’s Bond (One Bid Only)
- Fidelity Bond
- Performance Bond
- Surety Bond
- Heir’s Bond