Who typically files a claim on a surety bond?

In the context of surety bonds, the obligee is the party that requires the bond and is protected by it. This often includes individuals, businesses, or government entities that expect the principal (typically a contractor) to fulfill their obligations, such as completing a project or adhering to specific regulations. When the principal fails to meet these obligations, the obligee has the right to file a claim against the surety bond to seek compensation for their losses.

In contrast, the contractor, who is the principal in this arrangement, is the one who obtains the bond to assure the obligee that they will fulfill their obligations. The bonding company provides the financial backing and guarantees the performance of the principal but is not the party that files the claim; instead, they respond to claims made by the obligee.

Public authorities may also be involved in overseeing the requirements for the bond but do not file claims themselves unless they are acting as the obligee in certain contexts. Therefore, it is the obligee who typically initiates the claim process when there are breaches in the contract secured by the surety bond.