surety & bonds

A surety bond is an agreement between three parties: the surety company (the guarantor), the contractor (the principal), and the project owner (the obligee). A surety bond serves as a guarantee for the obligee that if the principal does not meet the expectations outlined in the contract, then the guarantor will reimburse the obligee in full. Surety bonds:  

• Protects the obligee from any default from the principal 
• Establishes expectations for the principal and obligee