Some companies may require a business to hold a certain surety bond before they will do business with them. Other surety bonds are used as a marketing tool to showcase to other businesses that they can be trusted by having the proper bond.
A surety bond is a legally binding contract between three parties. Surety bonds that are used for public and private businesses are generally written in the same three parts.
1) Obligee: This is the company that needs the bond to do business with them. The terms and the amount will be dictated by the oblige based on industry standards and regulations.
2) Principal: The person who owns the bond. They are responsible for fulfilling the terms of the bond.
3) Surety: The company that issues the bond. They are also liable in the case of a claim against the bond. It is important to find a surety company that is licensed and registered to do business in your industry, like us at SafeLineSuretyBond!