Insurance Glossary

Surety Bond

Business

Definition

A three-party agreement where the surety guarantees to the obligee that the principal will fulfill their contractual obligations, commonly required in construction and government contracts.

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Related Terms

Performance Bond
A surety bond that guarantees a contractor will complete a project according to contract terms, protecting the project owner from financial loss if the contractor defaults.
Payment Bond
A surety bond that guarantees a contractor will pay subcontractors, laborers, and material suppliers, protecting them from non-payment if the contractor defaults.
Business Interruption Insurance
Coverage that compensates a business for lost income during periods when operations are suspended due to covered perils such as fire, natural disaster, or other insured events.
Commercial General Liability
Insurance that protects businesses against claims of bodily injury, property damage, personal injury, and advertising injury that occur during normal business operations.
Workers' Compensation Insurance
Required insurance that provides medical benefits and wage replacement to employees who are injured or become ill in the course of employment.
Professional Liability Insurance
Also known as Errors and Omissions (E&O) insurance, this coverage protects professionals against claims of negligence, mistakes, or failure to perform professional duties.
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