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What is a Surety Bond Company? A Surety Bond Company (also called a surety, surety company or bonding company) is the party of the surety bond that takes on the risk and is responsible for paying the surety bond obligee in the case of a default by the surety bond principal.
Surety Bond Definition: While there are many different varieties, a surety bond is simply an agreement between three parties: Principal, Surety and Obligee. The surety provides a financial guarantee to the obligee (i.e. government) that the principal (business owner) will fulfill their obligations. Therefore, a surety bond is a risk transfer mechanism.