March 2016
Intermediate to advanced
700 pages
144h 54m
English
Content preview from Principles of Risk Management and Insurance, 13th EditionBecome an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
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Surety Bonds
A surety bond is a contract in which the surety guarantees to a second party (the obligee) that a third party (the principal) will faithfully perform its obligations to the obligee. For example, a contractor may be financially overextended and unable to complete a building project. A public official may embezzle public funds, or the executor of an estate may illegally convert part of the estate assets to his or her own use. Surety bonds can be used to meet these loss exposures.
Parties to a Surety Bond
There are three parties to a surety bond:
Principal
Obligee
Surety (obligor)
The principal is the party that agrees to perform certain acts or fulfill certain obligations. For example, a construction company may agree to build an office ...
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