Which party is typically responsible for paying the bond premiums?

The principal is typically responsible for paying the bond premiums. In the context of surety bonds, the principal is the party that is required to obtain the bond to guarantee their obligations, such as a contractor who must secure a bond to perform a project. The premiums are fees paid to the surety company that issues the bond, and it is the principal’s responsibility to cover these costs as they are directly related to their obligations and the bond’s purpose.

The obligee, the party that requires the bond for protection against the principal's failure to fulfill their obligations, usually does not pay the bond premiums. Instead, the financial obligation to pay for the bond lies with the principal whose actions the bond is meant to ensure. The surety is the entity that provides the bond but does not pay the premiums; they receive the payments from the principal. The agent may assist in facilitating the bond but is not responsible for paying the premiums.