What is the Definition of Surety Bond?

What is the Definition of Surety Bond?

A contract guaranteeing the performance of a specific obligation. Simply put, it is a three-party agreement under which one party, the surety company, answers to a second party, the owner, creditor or “obligee,” for a third party’s debts, default or nonperformance. Contractors are often required to purchase surety bonds if they are working on public projects. The surety company becomes responsible for carrying out the work or paying for the loss up to the bond “penalty” if the contractor fails to perform.

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Annuity?

What is the Definition of Surety Bond?

You can find random definition and meaning of insurance terms below:


What is the meaning of Net Premiums Earned

premiums on property/casualty or health policies that will not have to be returned to the policyholder if the policy is cancelled.


What is the meaning of National Flood Insurance Program

flood insurance and floodplain management for personal and business property administered under the National Flood Act of 1968. Encourages participation by private insurers through a flood insurance pool .


What is the meaning of Nonadmitted Assets

assets having economic value other than those which can be used to fulfill policyholder obligations, or those assets which are unavailable due to encumbrances or other third party interests and should not be recognized on the balance sheet.


Thank you for visiting our website and read this FAQ article about "What is the Definition of Surety Bond?". We hope you get what you searching for.

definitionly.com is a website that contains information about the definition or meaning of a word. You can search for the terms you are looking for in the search field above.

Related Posts

Subscribe Our Newsletter