Who is involved in a surety bond?

[Pacman]

Who are the parties involed in obtaining a surety bond? and what responsibilities do the have?

[PT]

Originally Posted by Pacman

Who are the parties involed in obtaining a surety bond? and what responsibilities do the have?

The parties involved in a Surety Bond are (1) the Obligee, (2) the Principal and (3) the Surety. The bond is a three party agreement. Your responsibilities as the Principal, are to operate your business according to the rules and regulations of the State in which you are obtaining the bond.

Who is the obligee?
The obligee is whoever is requiring the bond of you. You are not the obigee. For example, the obligee for a contractor would be whoever they are doing the work for. The obligee for a license bond (e.g. auto dealer or mortgage broker) would be whoever they are filing their license with.

[asmith]

Where does the insurance agent have to be licensed? Is it in the Principal's state, the obligee's state, or wherever the project or object of the surety bond is located?

Thank you!

[Admin]

The agent should be licensed in their state, as well as the obligee's.

[asmith]

Originally Posted by Admin

The agent should be licensed in their state, as well as the obligee's.

Thank you for your quick response. I've heard quite a few different theories on this subject but your answer seeems to be in line with the majority. I'll stick with that.
Thank you, again!