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What Are Surety Bonds?

A Quick Look At Different Types of Surety Bonds and Their Importance

A Bond is a guarantee between three parties. The three parties to a surety bond are:


The principal - is the one who is being required to obtain the bond.

The Obligee – is the one requesting the bond for financial security.

The Surety Company - guarantees the obligee that they will pay if there is a claim.

The Principal and the Surety company stand “jointly and severally” (both 100% responsible) to meet the obligation of the bond. The Principal and Surety are obligated to the Obligee. It is the Obligee, and most cases the general public who is protected and has the ability to claim on the bond. It’s the Principals responsibility to pay all obligations that arise from their operations. If the Principal defaults on a claim, the Surety is obligated to pay on their behalf. They surety will then enforce the indemnity agreement to recoup their loss from the Principal.


The Price Of a Surety May Vary

Commercial Surety - Lots of common license and permits bond for cities and counties can be approved with no underwriting starting at $50 a year. There is also a good amount of state required license bonds, such as some motor vehicle dealer's bonds that get approved without a credit check and start at 0.5% so a $25,000 bond could start as low as $125.00 for a year. But that depends on the state and if there is a program. Unity AIA partners with carriers that are more than happy to provide this service. Please schedule a conversation with one of our licensed representatives to get your started!



Contract Surety Bonds


Contract surety bonds are a common requirement in the construction business, and may be required for your company to bid for or complete projects. Unity AIA offers bid, payment, performance, supply and maintenance bonds for construction projects for the following types of contractors:

  • General contractors

  • Construction managers

  • Prime electrical

  • Prime mechanical

  • Highway and bridge

  • Paving

  • Sewer and water

  • Emerging contractors

  • Specialty trades


Commercial surety bonds


Commercial surety bonds may be required by local and state law to comply with state or federal regulations. We offer a variety of bonds to individuals, small businesses and Fortune 2000® companies:



  • Performance bonds (non-construction or supply)

  • Certificate of title bonds

  • Court bonds—judicial

  • Court bonds—fiduciary

  • Custom bonds

  • Depository bonds

  • Public official bonds (tax collectors, treasurers, notary)

  • License and permit bonds

  • Lost instrument bonds

  • Medicare DMEPOS bonds

  • Tax bonds (motor fuel, alcohol, tobacco)

  • Patient trust fund bonds

  • Professional school bonds

  • Workers’ compensation self-insured bonds

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