Surety Product

Coverage that Pays Your Obligation to a Third Party

Bonds – Individuals may sometimes need a bond.  For example, a trustee of an estate or a state may require a specific type of license or permit bond.  This type of coverage pays your obligation to a third party if you default on what you promised to do.  Because there are three parties – you (the principal), the firm receiving the promise (the obligee) and the firm backing the promise (the surety) – it is considered a surety product rather than an insurance policy.  Insurance policies are between two parties, the insured and the insurance company.

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Disclaimer
The definitions above are intended for information purposes only. Actual policy terms, conditions and exclusions of the actual polices may alter the definitions provided.