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surety bonds:
A Working Definition
Surety Bonds
Although surety bonds are within the general family of insurance, a surety bond is emphatically not insurance, as generally understood (think of the relationship between our domesticated dogs, and coyotes-- they’re related, but they’re not the same); nor should it ever be confused with insurance.  
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Surety bonds are typically a three-sided contract:

  • There is the Obligee, a French-sounding word which just means the entity (i.e. licensing authority in the case of commercial, or court, or contracting entity) requiring you to obtain the Surety bond.  Without the obligee there would be no surety bonding requirement;
  • There is the Surety, which is the financial guarantor of the surety bond provided.  AmeriPro Surety Bonds is not the surety, per se; we are, however, agents on behalf of the Surety.  This means that within due limits, we speak on the Surety’s behalf to you;
  • The Principal is YOU.  You are the one required to obtain a surety bond to meet the licensing requirement, court order, or approval for a contract entity --- among other obligations.

Summing Up Surety Bonds In One Sentence:

Although you, as Principal, are required to obtain the surety bond, your bond is for the benefit and the financial protection of the Obligee --- not you; and the guarantor of that financial obligation is the Surety.

Claims and A Way To Think of Your Bond

Unlike insurance, claims that are paid on a surety bond are to be recompensed to the Surety by the Principal.

Recall that the bond is not for your “protection” as Principal; it is for the benefit of the Obligee.  If it helps, you may think of your surety bond as a “type” of insurance that you buy for the benefit of the obligee.

AmeriPro Surety Bonds

AmeriPro Surety Bonds is a provider of commercial, court ordered/required, and non-construction contract surety bonds in all 50 states.