Which entity issues the Surety Bond?

The surety is the entity that issues the Surety Bond. A Surety Bond is a three-party agreement that involves the principal, who is the party that needs the bond; the obligee, who is the party that is protected by the bond; and the surety, which is the guarantor that assures the obligee that the principal will fulfill their obligations.

When the surety issues the bond, it provides a guarantee to the obligee that the principal will complete a project or meet certain obligations, such as adhering to laws or regulations. If the principal fails to meet those obligations, the surety is responsible for compensating the obligee, ensuring that the financial risk is mitigated. This role of the surety is crucial, as it provides a safety net for the obligee and helps maintain trust and accountability in contractual agreements.